If you’re looking for a safe and reliable way to save money every month, the Post Office Recurring Deposit (RD) Scheme might be just what you need. It’s a great option, especially for small investors who want a guaranteed return with minimal risk. Let’s break down how it works.
What is the Post Office RD Scheme?
The Post Office RD Scheme is a government-backed savings plan where you deposit a fixed amount every month for five years. After this period, you receive a guaranteed maturity amount, including interest. The current interest rate is 6.7% per annum, which is compounded quarterly.
How Does It Work?
- Monthly Deposit: You need to deposit a fixed amount each month. The minimum amount is ₹100, and there is no upper limit. For instance, if you deposit ₹10,000 per month for five years, your total investment will be ₹6 lakh.
- Interest Calculation: The interest rate of 6.7% is compounded quarterly. After five years (60 months), you will receive an interest of around ₹1,13,659, making the total maturity amount approximately ₹7,13,659.
Benefits of the Scheme:
- Guaranteed Returns: As the scheme is backed by the government, your returns are secure.
- Loan Facility: After 12 monthly deposits, you can take a loan of up to 50% of your accumulated amount.
- Advance Deposit: You can also deposit in advance for up to five years and get a small discount on the interest.
- Flexible Account Options: You can open a single or joint account, or even an account for a minor.
What Happens If You Miss a Payment?
If you miss a monthly deposit, a penalty of ₹1 for every ₹100 is charged. If you miss payments for four consecutive months, the account becomes inactive. However, you can reactivate it within two months by paying the pending installments with a small fine.
Early Withdrawal and Maturity:
You can close the account after three years, but the interest rate will be lower. After five years, you can either withdraw the entire amount or extend the scheme for another five years.
Why Choose This Scheme?
The Post Office RD Scheme is ideal for those who want to build a savings habit with a small monthly amount. The guaranteed returns and low risk make it a suitable option for conservative investors.
For more details, you can check the official Post Office website or visit your nearest branch.
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