The Post Office Recurring Deposit Account is one such Post Office Scheme, where a monthly investment of Rs. 10,000 can earn you up to Rs. 16 lakh in 10 years.
Long-term investments are the key to saving a lot of money. Post Office Schemes are a good choice for people who don't want to take big risks and want a guaranteed return.
One of these Post Office schemes is the Post Office Recurring Deposit Account. If you put away Rs 10,000 a month for 10 years, you can get up to Rs 16 lakh.
Calculation: Suppose you put Rs 10,000 into the Post office RD scheme every month. If you spend the money for 10 years, you can have Rs 16.28 lakh at the end of that time.
This computation uses Post Office RD's 5.8% interest rate. Post Office Recurring Deposit Account interest rates are 5.8% per year as of 01.04.2020. (quarterly compounded).
- Amount spent: Rs 10,000 every month - Interest: At the rate of 5.8% - Maturity: 10 years - Maturity amount after 10 years: Rs 16,28,963
When you open a Post Office Recurring Deposit Account, it will be good for 5 years (60 monthly deposits).
By making a request at the Post Office, the account can be extended for another 5 years. During the extension, the interest rate will be the same as when the account was first opened.
Extended accounts can be closed anytime during the term. For completed years, RD interest rate will apply, and for periods shorter than a year, PO Savings Account interest rate will apply.
There is no need to make a deposit in order to keep the RD account open for up to five additional years from the date it matures.