Post Office Scheme : When it comes to safe investments that also provide assured returns, Post Office schemes are considered one of the best options in India. The biggest advantage of these schemes is that the government itself guarantees the security of your deposited money, and along with safety, you also get attractive returns. Among the different savings schemes run by India Post, the Post Office Recurring Deposit Scheme (RD) is one of the most popular. This scheme allows investors to start saving with as little as ₹100 per month. With disciplined savings, you can accumulate a significant fund. For example, by saving just ₹333 daily (around ₹10,000 monthly), an investor can build a corpus of nearly ₹17 lakh. Let’s understand the complete calculation behind this.
Assured Interest Rate of 6.7% on Post Office RD
Under the Post Office Recurring Deposit (RD) scheme, investors currently earn an interest rate of 6.7% per annum, compounded quarterly. This makes it one of the most reliable small savings schemes available in India. Any individual can open an RD account at the post office, and even a minor (above 10 years of age) can open an account through their parents or guardians. Once the minor turns 18, they need to submit fresh KYC documents and complete the account-opening formalities in their own name. The account can be conveniently managed through mobile banking or internet banking, which provides ease of access for investors.
Maturity Period of 5 Years with Extension Option
The Post Office RD has a fixed maturity period of 5 years, making it a medium-term investment option. At the end of the maturity period, investors can choose to withdraw the funds or extend the account further in blocks of 5 years. This gives flexibility to those who want to continue building their savings for a longer period. The scheme also allows premature closure after 3 years, in case of urgent financial requirements. Additionally, in the unfortunate event of the account holder’s death, the nominee is entitled to claim the maturity amount or continue the account until maturity.
Rules for Monthly Deposits
There are specific rules for depositing money under the Post Office RD scheme. If the account is opened on or before the 15th day of any calendar month, the subsequent deposits must be made by the 15th of each following month. If the account is opened after the 16th of the month, the deposits should be made between the 16th and the last working day of each subsequent month. This structured system ensures timely deposits and steady accumulation of savings.
How Saving ₹333 per Day Creates a Fund of ₹17 Lakh
Now let’s break down the calculation that shows how a small daily saving can turn into a large fund. If you save ₹333 per day, this amounts to ₹10,000 per month. By depositing ₹10,000 every month in the Post Office RD scheme at the interest rate of 6.7%, your total investment over 5 years will be ₹6,00,000. On this, you will earn interest of around ₹1.13 lakh, making the maturity amount approximately ₹7.13 lakh.
If you extend the RD for another 5 years (a total of 10 years), your total contribution will be ₹12 lakh. With the power of compounding at 6.7% interest, the accumulated interest over this period will be ₹5,08,546. Therefore, after 10 years, the maturity value becomes ₹17,08,546. This shows how consistent small savings can help you achieve big financial goals.
Flexibility in Investment Amounts
The scheme is highly flexible because you can decide the amount you wish to invest every month. For example, instead of ₹10,000 per month, if you invest only ₹5,000 per month, your total investment over 10 years will be ₹6 lakh. At maturity, including interest, you will receive around ₹8,54,272, out of which ₹2,54,272 will be the interest earned. This flexibility makes it suitable for investors from different income groups who want to save regularly according to their financial capacity.
Why Post Office RD is a Smart Choice
The Post Office Recurring Deposit scheme is an excellent choice for those who want a risk-free investment with assured returns. Unlike market-linked instruments, your money does not fluctuate based on market conditions. Instead, you receive guaranteed returns backed by the Government of India. It is also a great way to develop the habit of regular savings, as monthly deposits build financial discipline. Whether you are saving for your child’s education, marriage, or any other long-term financial goal, this scheme provides security and certainty.
Conclusion
The Post Office Recurring Deposit scheme is a reliable and rewarding option for individuals who want to grow their savings steadily without taking risks. By saving just ₹333 per day, you can create a fund of over ₹17 lakh in 10 years. The safety of government backing, attractive 6.7% interest rate, and flexibility in deposits make it one of the best small savings schemes in India. For investors who want both security and decent returns, Post Office RD is undoubtedly a smart financial decision.