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National Savings Recurring Deposit Account (RD): When someone has small savings and wants to save money to invest, the first thing he wants to know is which options allow him to deposit money in small amounts and at regular intervals rather than depositing a large lump sum amount. For such people, small savings schemes play a vital role, as they allow people to deposit money in non-market-linked schemes that give them guaranteed returns and return the principal amount on maturity. The post office runs several small savings schemes for people from remote villages to big cities.
National Savings Recurring Deposit Account (RD), or Post Office RD, is a scheme where one can deposit small amounts of money in his account and earn interest on it.
The maturity period of the account is five years, which can be extended further.
Loan facility is also provided in this scheme. You can make an advance deposit or close the account before time.
Know the features of this Post Office Guaranteed Return Scheme and what you can get after five years on monthly deposits of Rs 5,000, Rs 10,000, Rs 15,000 and Rs 20,000 in an RD account.
The RD scheme offers 6.7 per cent annual interest, which is compounded on a quarterly basis.
The minimum investment that can be made in the account is Rs 100 and in multiples of Rs 10, while there is a maximum deposit limit.
Any individual can open an account individually or jointly, or a guardian can open an account on behalf of a minor or an unwell person.
Any minor above the age of 10 years can also open an account in his/her name.
If an account with Rs 100 is not deposited within a month then a fee of Rs 1 is charged.
The account can be closed after four regular defaults and can be revived within two months.
One can make advance deposits at the time of opening his account and thereafter for five years.
If someone has deposited 12 installments and the account continues for a year, they are eligible to deposit 50 per cent of the balance in the account.
Interest on loan will be 2% + RD interest rate applicable to the RD account.
RD account can also be closed prematurely after 3 years from the date of opening the account.
What will you get from monthly installments of Rs 5 thousand, Rs 10 thousand, Rs 15 thousand and Rs 20 thousand on maturity?
If you deposit Rs 5,000 per month
If your monthly deposit amount is Rs 5,000, or a total of Rs 300,000 over five years, at the rate of 6.70 per cent, you will get an interest of Rs 56,830 and the maturity amount will be Rs 3,56,830.
If you deposit Rs 10,000 per month
If your monthly deposit is Rs 10,000, or a total of Rs 600,000 over five years, your interest will be Rs 1,13,659 and you will get Rs 7,13,659 on maturity.
If you deposit Rs 15,000 per month
If your monthly contribution is Rs 15,000, or a total of Rs 900,000 over five years, you will get Rs 1,70,492 as interest and the maturity amount will be Rs 10,70,492.
If you deposit Rs 20,000 per month
If your monthly deposit amount is Rs 20,000, or a total of Rs 12,00,000 over five years, you will get interest of Rs 2,27,315 and the maturity amount will be Rs 14,27,315.
