Recurring Deposit (RD) of Post Office Schemes is a very safe and popular option for investment. This scheme is now giving interest just like fixed deposits. The special thing about this investment option is that here your money is not blocked all at once, it has the facility to invest on monthly basis. The central government last increased the interest rates for this scheme in September 2023. From the third quarter of the financial year 2023-24 till now, the interest on RD is 6.7 percent per annum (quarterly compounded). Many major banks are giving interest around this on their FDs.
Like FD, recurring deposit is also a safe option for investment, but here the convenience of investment is more. In FD, you have to invest lump sum money in any scheme. You can invest in RD in small installments every month like SIP. In this, interest is added to your account by compounding on quarterly basis.
Also read: FD vs RD: FD or RD, where will you get more benefits, decide after seeing the features and interest rate.
Who can open RD account
Any Adult Single Account
Joint Account (up to 3 adults together)
Any minor above 10 years of age in his own name
Parents can get it opened in the name of minor i.e. children below 18 years of age.
The account can be opened through cash or check as per convenience.
rules of maturity
In recurring deposit, the maturity is 5 years i.e. 5 years from the date of account opening (60 monthly deposits).
This account can be extended for further 5 years by applying at your nearest post office.
The interest rate applicable during account extension will be the same interest rate at which the account was opened.
The extended account can be closed at any time during the extension period.
Also read: FD: Interest on FD of small finance banks ranges from 8.50 to 9.50%, how safe is it to invest money in them?
How much can you deposit?
In the Post Office Savings Recurring Deposit Scheme, a minimum monthly deposit of Rs 100 is required. After this, any amount can be deposited in multiples of 10 i.e. Rs 1000 or Rs 10000. There is no limit to this.
If your RD account is opened before the 15th of the month, then the next deposit should be before the 15th. If the account is opened after the 15th, then the next deposit should be between the 16th and the last working day of the month.
Benefit on deposit of Rs 10,000 every month
For example, if you open an RD account in the post office and deposit Rs 10,000 every month for a period of 5 years i.e. till the maturity of the scheme, then after 5 years you will have a total of Rs 7,13,659. In 5 years, 12 it
Monthly Deposit: Rs 1,000
Duration: 5 years
Interest rate: 6.7 percent
Amount on maturity: Rs 7,13,659
Total investment: Rs 6,00,000
Profit: Rs 1,13,659
On extending account for 5 years
Monthly Deposit: Rs 10,000
Duration: 10 years
Interest rate: 6.7 percent
Amount on maturity: Rs 17,08,546
Total investment: Rs 12,00,000
Profit: Rs 5,08,546