Regarded as one of the most trusted investment options in India, Post Office small savings schemes provide a guaranteed return with no market risk. An almost wet and warm way to grow wealth steadily is through the Post Office Recurring Deposit (RD) or Time Deposit schemes. For instance, would you know that a simple investment of ₹12,500 per month by the investor can grow into a full ₹40 lakh fund with passage of time.
How the Scheme Works
Under a Post Office Recurring Deposit (RD) scheme, a government-run scheme, the investor has to deposit a fixed amount every month for a fixed tenure. Interest is accrued on the deposited sum quarterly, and consistently grows with compounding.
If one would put in an investment of ₹12,500 every month for a consequent period of 10 years, given the current Post Office RD interest rate of 6.7% per annum, he/she will have deposited a calculation of ₹15,00,000. Compound interest comes into the picture; the interest earned will add up to a whopping maturity value of nearly ₹40 lakh.
Advantages of Investing in Post Office RD
The RD is among the safest investments since it is backed by the Government of India. It offers guaranteed returns not subject to market fluctuation. Thus, it would become a favored choice for anyone with a low appetite for risk: salaried individuals, retired professionals, or people who want to save for long-term goals like a child’s education or marriage.
RD accounts can be opened either singly or jointly and moved from one post office in India to another. It comes handy if one does a bit of traveling or has to change work sometimes.
Why Is This Plan Attractive?
A monthly investment of ₹12,500 is surely one disciplined way to accrue a large corpus without straining one’s income. At maturity, the funds can be utilized for various huge expenditures such as a house, a new business, or retirement.
The scheme also provides for premature closure (after three years with a small penalty) to provide for liquidity in emergencies.
Final Thoughts
This investment option is well suited for those interested in relatively safe, steady, and guaranteed returns. The compounding of returns over a 10-year period with monthly subscriptions of ₹12,500 can nearly accumulate ₹40 lakh. This is the perfect solution for anybody who prefers not to take equity risks but to systematically grow their savings.