Investing in secure, government-backed schemes is a popular choice for Indian families, especially when planning for future goals. One such reliable option is the Post Office Recurring Deposit (RD) scheme. If you’re wondering, “If I invest ₹ 2,000 every month in the Post Office RD, how much will I get after 5 years?” — this guide breaks it down clearly for you.
Post Office Scheme
| Feature | Details |
|---|---|
| Monthly Investment | ₹ 2,000 |
| Tenure | 5 Years (60 months) |
| Interest Rate | 6.7% per annum (compounded quarterly) |
| Total Investment | ₹ 1,20,000 |
| Maturity Amount | Approx. ₹ 1,42,447 |
| Interest Earned | Approx. ₹ 22,447 |
| Official Source | India Post RD |
Investing ₹ 2,000 every month in the Post Office RD scheme is a smart, low-risk way to build a savings corpus of around ₹ 1.42 lakh in 5 years. The government-backed guarantee, fixed returns, and easy setup make it a go-to option for conservative savers and first-time investors.
What Is the Post Office Recurring Deposit Scheme?
The Post Office Recurring Deposit (RD) is a government savings scheme that allows individuals to deposit a fixed amount every month for 5 years. It earns compound interest quarterly, making it a smart option for people who prefer steady, disciplined savings with guaranteed returns.
This scheme is particularly popular among:
- Salaried employees planning for mid-term goals
- Parents saving for children’s education
- Retired individuals seeking assured returns without market risk
see also: How Much Return Will You Get in 5 Years on Investing ₹4 Lakh?
How Much Will You Get After 5 Years If You Invest ₹ 2,000 Monthly?
Let’s calculate based on the current interest rate of 6.7% per annum, compounded quarterly.
Formula Used:
The maturity value (MV) for RD is calculated using this formula:
MV = P * [ (1 + r/4)^(n*4) – 1 ] / [1 – (1 + r/4)^(-1/3)]
However, for ease, the India Post provides ready reckoner charts or you can use an RD calculator.
Approximate Calculation:
- Monthly Deposit = ₹ 2,000
- Tenure = 60 months
- Interest Rate = 6.7% per annum, compounded quarterly
Based on these inputs, the maturity amount you will receive is approximately ₹ 1,42,447.
- Total Investment: ₹ 2,000 x 60 = ₹ 1,20,000
- Interest Earned: ₹ 22,447
Benefits of Investing in Post Office RD
1. Government-Backed Security
Your money is completely safe, as the scheme is managed by India Post, under the Ministry of Finance.
2. Attractive Fixed Returns
An interest rate of 6.7% is quite competitive for a fixed-income option, especially compared to many regular savings accounts.
3. Quarterly Compounding
Unlike many bank RDs that offer annual compounding, this scheme uses quarterly compounding, helping your money grow faster.
4. Easy to Start and Operate
You can open an RD account in any post office with just ₹ 100 as a minimum deposit.
5. Nomination & Loan Facility
- You can nominate a beneficiary.
- After 1 year, you can avail up to 50% loan on your deposit.
Step-by-Step Guide to Open a Post Office RD
Step 1: Visit the Nearest Post Office
Collect and fill out the RD account opening form.
Step 2: Submit Required Documents
- Aadhaar Card
- PAN Card
- Passport-size photograph
- Initial deposit (minimum ₹ 100)
Step 3: Choose the Monthly Investment
Decide your deposit amount (₹ 2,000 in our example). It must be in multiples of ₹ 10.
Step 4: Start Depositing Monthly
Pay before the 15th of each month to avoid penalties. You can use cash, cheque, or online transfer (through IPPB).
Step 5: Track Your Account
You’ll receive a passbook or can use the India Post online portal to check balance and maturity value.
Tax Implications
While the RD amount is taxable, no TDS (Tax Deducted at Source) is deducted by India Post.
- Interest earned must be declared under “Income from Other Sources” when filing your ITR.
- No Section 80C benefits are available for RD deposits.
For better tax efficiency, consider clubbing it with 5-year Post Office Time Deposit (TD) or PPF, which offer tax-saving benefits.
Who Should Invest in This Scheme?
This scheme is ideal for:
- Conservative investors
- Beginners just getting started with monthly savings
- Parents saving for short-term education costs
- Senior citizens looking for risk-free income options
If you are looking for steady returns, low risk, and predictable growth, this is a solid plan.
see also: How Much Will You Get on Maturity from a ₹2.5 Lakh PNB Fixed Deposit in 2025?
Post Office Scheme FAQs
Q1. Can I open more than one RD account in the Post Office?
Yes, there is no restriction on the number of RD accounts you can open.
Q2. What happens if I miss a monthly deposit?
A default fee of ₹1 per ₹100 is charged for each month of delay. After 4 continuous defaults, the account becomes discontinued.
Q3. Can I close the account before 5 years?
Yes, premature closure is allowed after 3 years, but you will earn a lower interest rate (applicable to Post Office Savings Account).
Q4. Is it better than bank RD schemes?
Yes, in some ways. Quarterly compounding, government backing, and consistent returns make it more secure and often better than many bank RDs.
Q5. Can I transfer my RD account to another post office?
Yes, RD accounts are fully transferable between post offices.
