Whenever we have a lump sum amount and think about investing, the thought of a fixed deposit comes to mind. This is because the return of FD is fixed. Also, there is no risk. But, before deciding on investment, we often forget to look into the post office scheme. Like banks, post offices also run investment and savings schemes. These schemes are of both short and long type. The Post Office Recurring Deposit Scheme is one such scheme.
With the help of Post Office Recurring Deposit (RD), you can easily create a big fund. If you keep investing a fixed amount in it every month. If you continue investing for 5 years, then you will have a big amount in your hand on maturity.
Who can open an account?
Any person can open an RD account in the post office. If you are 10 years or more old, you can operate it yourself. 3 people can also operate it together in a joint account. The minimum limit for investing in the RD scheme of the post office is Rs 100. The maximum limit is not fixed.
How much interest is being received now?
Right now 6.70% annual interest is being given on RD. The interest rate is compounded every quarter. That means you get interest on interest as well. If you take a loan on RD, then the interest on the loan amount will be applicable as 2% + the interest rate applicable on the RD account. That means you will get a loan at an interest rate of 8.7% per annum.
How much loan will be available?
Loans can also be availed on the money deposited in RD. If you deposit 12 installments continuously in a five-year RD, then you can avail the facility of a loan of 50% of the deposited amount. There is no need to break the RD for this. The interest on this loan is less than that of a personal loan.
How much return on how much investment?
If you invest 1 thousand rupees every month for 5 years in the Post Office Recurring Deposit Scheme, you will deposit a total of 60 thousand, but you will get a return of 71 thousand 369 rupees with interest. If you invest 2 thousand every month, after 5 years this amount will become 1 lakh 42 thousand 732 rupees. If you deposit 5 thousand rupees every month, then in 5 years this amount will be 3 lakh rupees. If you add interest on this, then it will become 3 lakh 56 thousand 830 rupees.
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