The Post Office Recurring Deposit (RD) Scheme is a safe and reliable savings plan backed by the Government of India. With a modest investment of just ₹600 per month, you can grow your savings significantly over time. But is it really possible to get over ₹10 lakh with this scheme? In this article, we break down the details of how the Post Office RD works, its benefits, interest rates, and how you can maximize your returns.
Post Office RD Scheme
| Feature | Details |
|---|---|
| Minimum Monthly Deposit | ₹100 (in multiples of ₹10) |
| Investment Tenure | 5 years (60 months) |
| Interest Rate | 6.7% per annum (compounded quarterly) |
| Premature Withdrawal | Allowed after 3 years (with conditions) |
| Loan Facility | Up to 50% of the deposited amount after 12 months |
| Official Website | India Post |
The Post Office RD Scheme is an excellent savings tool for those looking for guaranteed, risk-free returns. While a ₹600 per month deposit alone won’t yield ₹10 lakh, increasing your monthly deposit and extending the tenure can help you reach your financial goals. This scheme is perfect for beginners, salaried professionals, and risk-averse investors who want a disciplined way to save.
Understanding the Post Office RD Scheme
The Post Office RD Scheme is a recurring deposit program designed to encourage systematic savings. You can start with as little as ₹100 per month, making it an ideal option for those looking for a secure investment avenue with guaranteed returns.
How Does It Work?
- You deposit a fixed amount every month for 5 years.
- The interest rate is compounded quarterly (currently 6.7% per annum).
- At maturity, you receive your principal amount along with interest earned.
see also: ₹5 Lakh Investment in Post Office Scheme
Can You Really Earn ₹10 Lakh?
Many people wonder if they can turn a small monthly deposit into a substantial amount. Here’s the reality:
Scenario 1: Depositing ₹600 per Month
- Total Investment: ₹600 x 60 months = ₹36,000
- Total Interest Earned: ₹6,820
- Maturity Amount: ₹42,820
Clearly, a monthly deposit of ₹600 alone will not reach ₹10 lakh. To achieve a higher return, you need to increase the monthly deposit amount or extend the tenure.
Scenario 2: Depositing ₹8,600 per Month for 10 Years
If you invest ₹8,600 per month for 10 years, here’s how your savings will grow:
- Total Investment: ₹8,600 x 120 months = ₹10,32,000
- Total Interest Earned: ~₹2,83,000
- Maturity Amount: ₹13,15,000+
This example shows that by increasing the monthly deposit, it is possible to accumulate over ₹10 lakh in the long term.
Step-by-Step Guide to Investing in Post Office RD
Step 1: Open a Post Office RD Account
- Visit the nearest Post Office or open an account online via India Post.
- Fill out the RD application form.
- Provide KYC documents (Aadhaar, PAN, etc.).
- Deposit the first minimum amount of ₹100 or more.
Step 2: Make Monthly Deposits
- You must deposit a fixed amount every month.
- You can deposit cash, cheque, or set up automatic deductions from your bank account.
Step 3: Earn Interest and Watch Your Money Grow
- The interest is compounded quarterly, meaning your money grows faster.
- Use an RD Calculator to estimate your returns.
Step 4: Withdraw or Extend Upon Maturity
- After 5 years, you can withdraw the full maturity amount.
- You also have the option to extend the RD for another 5 years to maximize earnings.
Benefits of Post Office RD Scheme
Guaranteed Returns
Unlike stock market investments, the Post Office RD offers fixed returns with no risk.
Government-Backed Security
Post Office Popular Scheme: Earn 4 Lakh Rupees Interest on Maturity with This Investment
Your deposits are 100% safe, backed by the Government of India.
Affordable & Flexible
You can start with just ₹100 per month, and there is no upper limit on deposits.
Loan Facility
Need funds? You can avail up to 50% of your deposited amount as a loan after 12 months.
see also: Attractive FD Interest Rates on 400, 444, and 555 Days FD Schemes
Post Office RD Scheme FAQs
1. Can I withdraw my Post Office RD early?
Yes, you can withdraw your RD after 3 years, but a penalty may apply.
2. Can I increase my RD deposit amount?
No, once you set the deposit amount, it remains fixed for the tenure.
3. Is the interest earned on Post Office RD taxable?
Yes, interest is taxable under your income tax slab.
4. How to check my Post Office RD balance?
You can check your RD balance:
- By visiting the nearest Post Office.
- Online via India Post’s website.
- Using the IPPB Mobile Banking App.
5. Can I open multiple RD accounts in the Post Office?
Yes, you can open multiple RD accounts with different deposit amounts.
