Investing can be a daunting task with many options available these days. However, post office schemes are a popular choice among people due to their guaranteed returns supported by the central government. One such scheme is the Post Office Recurring Deposit, which offers good returns with a certain amount of monthly investment.
The central government has introduced various small savings schemes for different sections of people, such as the Public Provident Fund (PPF) for employees, Sukanya Samriddhi for women, Mahila Samman Scheme, Senior Citizen Savings Scheme for senior citizens, and the Post Office Monthly Income Scheme for monthly income. The Kisan Vikas Patra Single Investment Scheme is another attractive option.
The Post Office Recurring Deposit allows you to invest a certain amount every month for a tenure of five years, with a current interest rate of 6.70%. Unlike banks, which offer different tenures starting from 6 months, the Post Office Recurring Deposit has a fixed tenure of five years, and the interest rates are revised every three months. Last year, the scheme increased the interest rates.
Investing small amounts every month can yield huge returns on maturity, even for a five year deposit. The deposit can also be extended for another five years, allowing for a total deposit period of ten years. The minimum investment amount is Rs. 100, and any amount can be invested in multiples of Rs. 10.
While the deposit has a tenure of five years, there is flexibility to withdraw the account under certain special circumstances after three years of opening the deposit. However, this will result in a reduced interest rate and lower profits. The scheme is available for individuals, and a joint account can be opened for up to three people.
For instance, if you invest Rs. 5,000 every month at a 6.7% interest rate for five years, you will receive Rs. 56,830 as interest, with the total maturity amount being Rs. 3,56,830. If you extend the account for another five years, the total maturity amount after ten years will be Rs. 8,54,272. Similarly, if you invest Rs. 10,000 every month for ten years, you will receive a total maturity amount of Rs. 17,08,546, with interest being Rs. 5,08,546. In five years, the interest rate comes to Rs. 1,13,659.
