The Post Office Recurring Deposit (RD) Scheme is a secure and effective investment option that allows individuals to save and grow their money over time. Much like a piggy bank, this scheme helps depositors accumulate wealth by making small monthly investments.
By depositing a fixed amount each month, investors can build a significant corpus over time. This article provides a detailed guide on how the Post Office RD Scheme works, its eligibility, benefits, and investment calculations.
Post Office RD Scheme
| Details | Information |
|---|---|
| Scheme Name | Post Office Recurring Deposit (RD) |
| Minimum Deposit | Rs 100 per month |
| Maturity Period | 5 years (extendable to 10 years) |
| Interest Rate | 6.7% (subject to revision) |
| Maximum Accounts | Multiple accounts allowed |
| Official Website | www.indiapost.gov.in |
How the Post Office RD Scheme Works
The Post Office RD Scheme allows individuals to make fixed monthly deposits over a specified period, accumulating wealth through compound interest.
1. Open an Account with Just Rs 100
- Investors can start an account with a minimum deposit of Rs 100 per month.
- The maturity period is 5 years, with an option to extend up to 10 years.
- Accounts can be opened in the name of minors, with parents or guardians managing the account.
- This scheme is ideal for salaried individuals looking to invest small amounts regularly.
2. Interest Rate & Growth Calculation
- The current interest rate offered is 6.7% per annum.
- Interest is compounded quarterly, maximizing the growth of savings.
Investment Calculation: How to Earn Rs 1 Lakh+
One of the most attractive features of this scheme is the ability to accumulate large savings over time with small monthly contributions.
| Monthly Deposit | Total Deposit (5 Years) | Interest Earned | Total Maturity Amount |
| Rs 500 | Rs 30,000 | Rs 5,685 | Rs 35,685 |
| Rs 1,000 | Rs 60,000 | Rs 11,369 | Rs 71,369 |
| Rs 2,000 | Rs 1,20,000 | Rs 22,738 | Rs 1,42,738 |
10-Year Investment Projection
If extended for another 5 years, the savings grow exponentially:
| Monthly Deposit | Total Deposit (10 Years) | Interest Earned | Total Maturity Amount |
| Rs 500 | Rs 60,000 | Rs 25,428 | Rs 85,428 |
| Rs 1,000 | Rs 1,20,000 | Rs 50,857 | Rs 1,70,857 |
| Rs 2,000 | Rs 2,40,000 | Rs 1,01,714 | Rs 3,41,714 |
Benefits of the Post Office RD Scheme
This scheme offers multiple advantages, making it a popular choice for investors.
1. Secure Investment
- The scheme is backed by the Government of India, making it risk-free.
2. Small & Flexible Contributions
- Investors can start with as little as Rs 100 per month.
- Allows monthly deposits based on affordability.
3. Compound Interest Growth
- Interest is compounded quarterly, leading to higher returns over time.
4. Multiple Account Options
- Investors can open multiple accounts.
- Accounts can be opened in the name of children.
- Joint accounts (up to 3 individuals) are allowed.
How to Open a Post Office RD Account
1. Eligibility
- Any Indian citizen can open an account.
- Minors aged 10 and above can open an account in their name.
- Parents/guardians can open accounts for younger children.
2. Required Documents
To open an account, applicants must submit:
- Identity proof (Aadhaar Card, PAN Card, Voter ID)
- Address proof (Utility bill, Passport, Driving License)
- Two passport-size photographs
- Initial deposit amount
3. Steps to Open an Account
- Visit the nearest post office.
- Request and fill out the RD application form.
- Submit documents along with the first deposit.
- Receive a passbook to track savings and interest earned.
Frequently Asked Questions (FAQs)
1. What is the minimum deposit amount for the Post Office RD Scheme?
The minimum deposit amount is Rs 100 per month.
2. Can I open multiple RD accounts in the post office?
Yes, investors can open multiple RD accounts.
3. What happens if I miss a deposit?
If a deposit is missed, a nominal penalty is charged. The account will remain active if deposits are resumed.
4. Can I withdraw money before maturity?
Yes, premature withdrawals are allowed after 3 years, subject to conditions.
5. What is the maximum tenure for an RD account?
The standard tenure is 5 years, but it can be extended to 10 years.
6. Is the interest earned taxable?
Yes, interest earned is taxable, but investors can claim tax benefits under Section 80C of the Income Tax Act.
7. Can I transfer my RD account to another post office?
Yes, RD accounts can be transferred to any post office across India.
The Post Office RD Scheme is a safe and effective savings option, particularly for individuals looking for steady and guaranteed returns. By making small, regular deposits, investors can accumulate substantial savings over 5 to 10 years.
With low risk, flexible contributions, and guaranteed returns, this scheme is an excellent choice for salaried individuals, parents saving for children, and anyone looking to build long-term wealth.
For more details, visit the official India Post website.
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