Post Office RD: Building a large savings corpus does not always require investing a big amount at once. For people who prefer making regular monthly deposits, the Post Office Recurring Deposit (RD) scheme offers a structured way to save over a fixed period.
The scheme is designed for individuals who want to make small, regular investments instead of putting a lump sum into a savings product. The Post Office RD has a five-year maturity period, while the minimum monthly deposit is ₹100. Deposits can be made in multiples of ₹10.
What is the Post Office RD Interest Rate?
The Post Office RD currently carries an interest rate of 6.7% per annum. The rate is notified by the government for the applicable period and can change from time to time.
Unlike market-linked investments, the returns under this small-savings scheme are based on the applicable government-notified interest rate. This makes the scheme suitable for savers who prefer regular deposits and a defined maturity period.
What Happens If You Invest ₹9,000 Every Month?
Suppose you are able to save ₹300 every day. Over 30 days, this comes to around ₹9,000 per month.
If you deposit ₹9,000 every month into a Post Office RD for five years, you will make 60 monthly deposits. Your total contribution during the five-year period will be:
₹9,000 × 60 = ₹5.40 lakh
At the applicable 6.7% interest rate, the interest earned over the investment period works out to around ₹1.02 lakh, taking the total maturity amount to approximately ₹6.42 lakh.
The exact maturity amount can vary according to the applicable interest rate and the rules in force during the investment period.
Investment Can Start From ₹100
The Post Office RD can be started with a monthly deposit of just ₹100, making it possible to begin saving according to your income and financial capacity. There is no maximum deposit limit, while subsequent deposits have to follow the applicable rules of the scheme.
For example, someone who can set aside ₹300 a day may choose to build a monthly RD contribution of ₹9,000. Continuing such regular deposits for five years can help create a sizeable savings corpus.
The Post Office RD is therefore based on a simple approach: make fixed monthly deposits, earn interest at the applicable rate and receive the accumulated amount with interest at maturity.
Disclaimer
This article is intended for general informational purposes only. Interest rates, maturity amounts and other Post Office RD rules may change according to government notifications and applicable regulations. Readers should verify the latest terms and calculate their expected returns with the Post Office before making an investment decision.