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Even today, for millions of people when it comes to safe and reliable investments, post office The name of comes first. There are many great schemes out there, but people often get confused as to which scheme is best for them and where investing the money will yield the most benefits.
Today we will talk about one such superhit scheme of the post office, Recurring Deposit (RD) About this. Can this small savings scheme really make you rich one day? Let us understand its entire mathematics in simple language.
So what is RD and how is it different from FD?
you can do this in your ‘Monthly piggy bank’ Can understand.
In RD: You have to deposit a fixed amount (like ₹1000, ₹2000 or ₹5000) every month for a fixed period (usually 5 years).
In FD (called Time Deposit or TD in the post office): You deposit a large lump sum amount (say ₹1 lakh) for a fixed period.
Meaning, RD is best for people who want to save a small amount every month, while FD is for people who have a lump sum amount.
How does RD work? (Terms and Benefits)
How much to start with?: You can open this account with just ₹100 per month. And there is no maximum limit, you can deposit as much as you want.
For how long to deposit?: The tenure of Post Office RD is 5 years. After completion of 5 years, you get your deposit back along with interest. If you want, you can also extend it for the next 5 years.
How much interest is available?: Post Office RD currently offers interest at the rate of 6.7% per annum, which is added to your account every three months. (This rate is subject to change)
Who can open this account?:
Any Indian citizen.
A child above 10 years of age can operate it by himself.
Three people can also open a joint account.
What is the math behind ₹17 lakh and ₹42 lakh?
Now coming to the most interesting question. Can you become a millionaire from RD? Yes, of course! Just for this you will have to save more.
How to make ₹17 lakh in 5 years?: If you make an RD of ₹21,500 every month for 5 years, at 6.7% interest rate, after 5 years you will have a corpus of around ₹15.84 lakh. (Note: This is a rough estimate, the actual amount may be slightly more or less. For ₹17 lakh, the investment will be higher).
And ₹42 lakh in 10 years?: If you continue the same RD for the next 5 years (total 10 years) and also increase your monthly investment, you can comfortably build a corpus of ₹40-₹42 lakh.
So the point is simple – Post Office RD may not make you rich overnight, but it is a safe, reliable and guaranteed way to convert small savings into a big sum.