If you’ve ever wondered how much wealth you could create by saving a small amount every month, you’re not alone. One of the most searched personal finance questions in India today is: “By depositing just ₹1,500 every month, how do I get ₹1,07,050 — and in how many years?”
This might sound like magic, but it’s pure math—and the answer lies in Recurring Deposit (RD) schemes offered by India Post and banks. These schemes combine consistent monthly deposits with compound interest, helping ordinary savers reach extraordinary milestones.
Post Office Scheme: Get ₹1,07,050
| Feature | Details |
|---|---|
| Monthly Deposit | ₹1,500 |
| Scheme Type | Recurring Deposit (RD) |
| Interest Rate | ~7% per annum (compounded quarterly) |
| Maturity Amount | ₹1,07,050 |
| Tenure Required | Approx. 5 years |
| Best For | Salaried individuals, students, small savers |
| Where to Invest | India Post RD |
| Taxability | Interest is taxable; TDS applies over ₹40,000 interest/year (₹50,000 for senior citizens) |
By depositing just ₹1,500 every month in a Recurring Deposit scheme, you can build a safe, guaranteed fund of ₹1,07,050 in 5 years. This strategy is ideal for first-time investors, students, homemakers, and salaried individuals. Whether you choose India Post or a trusted bank like SBI or HDFC, consistency and discipline will be your greatest allies.
What Is a Recurring Deposit and How Does It Work?
A Recurring Deposit (RD) is a safe and simple savings scheme where you deposit a fixed amount every month, and earn compound interest on it. At the end of the tenure, you receive a lump sum maturity amount which includes your total deposits and the interest earned.
Example:
- If you deposit ₹1,500 every month for 5 years, and the bank offers 7% annual interest, your maturity amount becomes ₹1,07,050.
- Your total deposit over 5 years: ₹1,500 × 60 months = ₹90,000
- Interest earned = ₹17,050
see also: FD Vs SIP: Know Which Is the Better Option for Investment in 2025
How Is the ₹1,07,050 Calculated?
The maturity amount of an RD is calculated using this formula:
A = P × (1 + r/n)^(nt) – 1 / (1 – (1 + r/n)^–1/n)
Where:
- A = Final maturity amount
- P = Monthly deposit (₹1,500)
- r = Annual interest rate (7% or 0.07)
- n = Number of compounding intervals (4 for quarterly)
- t = Tenure in years (5 years)
Where Can You Open an RD for This Return?
Here are the best options to start your recurring deposit:
1. Post Office RD
- Interest Rate: 6.7% per annum (as of Q1 FY 2025)
- Tenure: Minimum 5 years
- Minimum deposit: ₹100/month
- Backed by: Government of India
2. SBI Recurring Deposit
- Interest Rate: 6.80% – 7.10% (depending on tenure and age)
- Minimum deposit: ₹100
- Tenure: 12 to 120 months
3. HDFC Bank RD
- Interest Rate: Up to 7.25% for senior citizens
- Tenure: 6 months to 10 years
Why This Plan Is Great for Beginners
- Low Barrier to Entry: You only need ₹1,500 per month.
- Safe Investment: No stock market risk.
- Automatic Saving Habit: Helps build financial discipline.
- Guaranteed Returns: Unlike mutual funds or SIPs, returns are fixed.
- No Market Dependency: Perfect for risk-averse individuals.
How to Start This Monthly Deposit Plan: Step-by-Step
Here’s how you can start your ₹1,500 monthly RD plan:
Step 1: Choose the Platform
- Decide between a bank RD or a Post Office RD.
- If you prefer offline, Post Office is easy.
- For online convenience, banks like SBI, HDFC, or ICICI are best.
Step 2: Open the Account
- Online: Via your bank’s mobile or net banking
- Offline: Visit the nearest branch or post office with KYC documents
Step 3: Set Auto-Debit
- Link your RD with your savings account
- Set an ECS mandate to ensure monthly deposits
Step 4: Track Your Progress
- Use your bank’s app or passbook
- Check your interest accrual quarterly
Important Tax Rules to Know
- The interest earned on RD is fully taxable as per your income tax slab.
- TDS of 10% is deducted if total interest exceeds ₹40,000 per financial year (₹50,000 for seniors).
- Submit Form 15G/15H to avoid TDS if you’re under the taxable limit.
Pro Tips from Finance Experts
- Combine with SIP: Once you’re comfortable, try adding a SIP to diversify returns.
- Set Alerts: Don’t miss a deposit! Missing even one can affect your interest.
- Use for Goals: Great for short-term goals like buying a laptop, travel, or emergency fund.
- Avoid Premature Withdrawal: You’ll lose interest and may pay penalty charges.
see also: Scheme of Post Office: You Will Get Fixed Interest of ₹5,550 Every Month
Post Office Scheme FAQs
Q1: Is ₹1,500/month too small to start investing?
No! Starting small is better than not starting at all. Over time, your savings plus compound interest will surprise you.
Q2: What happens if I miss one monthly payment?
Banks usually allow a grace period but may deduct a small penalty. Regular payment is key to earning full interest.
Q3: Can I increase the monthly RD amount later?
Not in the same RD. You’ll have to start a new RD with a higher monthly amount.
Q4: Is this RD amount guaranteed?
Yes. The principal and interest are fixed and guaranteed by banks or India Post.
Q5: Can senior citizens earn more?
Absolutely! Most banks offer 0.50% extra interest to senior citizens.
