India Post has long been one of the most trusted and secure investment options for ordinary citizens in India. Apart from a regular savings account, the post office offers several small savings schemes where people can invest their money safely. These include Recurring Deposit (RD), Public Provident Fund (PPF), Kisan Vikas Patra (KVP), Time Deposit (TD), and the Monthly Income Scheme (MIS).
Among these, the Post Office Recurring Deposit (RD) scheme is especially popular among salaried individuals and small savers. Let’s understand how this scheme works and how saving ₹3,500 every month can help you build a strong corpus.
What Is the Post Office RD (Recurring Deposit) Scheme?
The Recurring Deposit (RD) scheme is a savings plan in which you deposit a fixed amount every month for a predetermined period. It is ideal for people who want to develop a disciplined saving habit and gradually accumulate a sizeable amount for future needs such as education, marriage, or emergencies.
The Post Office RD scheme is backed by the Government of India, making it a safe and low-risk investment option.
Current Interest Rate on Post Office RD
At present, the Post Office RD scheme offers an interest rate of 6.7% per annum. You can start investing with as little as ₹100 per month, and there is no upper limit on the monthly deposit amount.
To open an RD account, you must already have a savings account with the post office. Based on your financial capacity, you can choose how much you want to deposit every month.
Loan Facility on RD Account
One of the major advantages of the Post Office RD scheme is the loan facility. If your RD account has been active for at least one year and you have deposited all 12 monthly installments without default, you become eligible for a loan.
You can take a loan of up to 50% of the total amount deposited in your RD account. The loan can be repaid either in a lump sum or through monthly installments, as per your convenience.
How Will ₹2.10 Lakh Turn Into a Bigger Fund?
The maturity period of a Post Office RD account is 5 years (60 months). If needed, it can also be extended for another 5 years after maturity.
Let’s understand this with an example:
- Monthly deposit: ₹3,500
- Investment period: 60 months (5 years)
- Total amount invested: ₹2,10,000
At the current interest rate of 6.7% per annum, the maturity amount after 5 years will be approximately ₹2,49,776.
This means you earn around ₹39,776 as interest, over and above your original investment.
Why the Post Office RD Scheme Is a Good Choice
The Post Office RD scheme is an excellent option for people who want guaranteed returns without market risk. It encourages regular savings, offers stable interest, and provides liquidity through loan facilities.
For anyone looking to build a secure financial cushion over time, this scheme can play an important role in long-term financial planning.
Disclaimer
This article is for informational purposes only. Interest rates and rules related to Post Office savings schemes are revised by the Government of India from time to time. Before investing, please visit your nearest post office to verify the latest interest rates, terms, and conditions.
