Post Office: The Finance Ministry has announced changes in the interest rates of small savings schemes for the July-September quarter. Under this change, 5 year recurring deposit has been made more attractive.
The government increased its interest rates by a whopping 30 basis points. Now post office recurring deposits will get 6.5 percent interest instead of 6.2 percent. Apart from this, the interest rate on time deposits of 1 year and 2 years has also been increased by 10 basis points.
This is a scheme which is meant for medium term investors. Interest of 6.5 percent is available annually, but the calculation is done on the basis of quarterly compounding.
The minimum amount that can be deposited is Rs 100 and thereafter any amount in multiples of Rs 100. Let us tell you that unlike banks, recurring deposits of post office are only for 5 years.
Later it can be extended again for 5 years. During extension, you will get the benefit of old interest rates only.
By depositing Rs 10 thousand you will get Rs 7.10 lakh
According to the post office RD calculator, if an investor deposits Rs 10 thousand every month, he will get Rs 7 lakh 10 thousand after five years. His total deposited capital will be Rs 6 lakh and the interest share will be around Rs 1 lakh 10 thousand.
If you also want to open a recurring deposit account in the post office, then let us tell you that if you open the account between 1st to 15th.
Therefore, deposit has to be made by 15th of every month. If the account is opened in any month after the 15th, the installment will have to be deposited by the end of every month.
One day’s haste will cause huge losses
Loan facility is also available on depositing 12 installments. The interest rate will be 2 percent more than the interest rate on RD account. If the account is closed even 1 day before 5 years, then only the benefit of interest on the savings account will be available. At present the interest rate on savings account is 4 percent.
