Post office runs a lot of small savings schemes to encourage people to save money. National Savings Recurring Deposit Account, or the 5-Year Post Office Recurring Deposit Account (RD) in one such scheme. Here, an investor can make monthly deposits and get the maturity amount at the end of the five-year lock-in period. Since its a guaranteed return scheme, people who want safe investment options and don't want to invest in market-linked avenues invest their money in a post office RD. Other than the post office, the RD scheme is also run by banks. However, the interest rates of RDs in a post office and banks may differ. One can get up to Rs 3.57 lakh, Rs 7.14 lakh, and Rs 10.71 lakhif one invests Rs 5,000, Rs 10,000, and Rs 15,000 in a post office RD scheme. Before we take you through the calculations, know a few features of the post office RD scheme.
Post Office RD: Who can open account?
One can open a single or a joint account in the post office RD. A guardian on behalf of a minor, or on behalf of a person of unsound mind, or a minor above 10 years in their own name, can open an account.
Post Office RD: Interest rate
The post office scheme provides an interest rate of 6.7 per cent annually compounded quarterly.
Post Office RD: Minimum and maximum deposits
The minimum deposit in the scheme is Rs 100 a month or any amount in multiples of Rs 10. However, there is no limit for maximum deposits. One can also make advance deposits up to 5 years in an RD account if it is not discontinued.
Post Office RD: Maturity period
The maturity period for the RD account is five years, but the account can be extended for another five years. One can also prematurely close the account after three years from the date of opening the account.
Post Office RD: Loan against RD
After making 12 instalments and continuing account, an RD account holder may avail the loan facility up to 50 per cent of the balance credit in the account.
Post Office RD: What Rs 5K, Rs 10K and Rs 15K p.m. investments will give you
If you invest Rs 5,000 a month for five years (60 months) in a post office RD, your total deposits will be Rs 3,00,000, the interest earned will be Rs 56,830, and your total maturity amount will be Rs 3,56,830.
On a Rs 10,000 per month investment for five years, your total deposits will be Rs 6,00,000, the interest earned will be Rs 1,13,659, and and the maturity amount will be Rs 7,13,659.
If you increase your investment amount to Rs 15,000 a month and invest it for five years, your total deposits in that period will be Rs 9,00,000, the interest amount will be Rs 1,70,492, and and the maturity amount will be Rs 10,70,492.
