The stock market continues to be volatile. In such a situation, if you want a guaranteed return on your money, and you want complete safety and security, then the Post Office Savings Scheme has become the most reliable option. One of the most popular schemes is the ‘National Savings Recurring Deposit Account’, commonly known as RD. You can start investing in this scheme with just Rs 100 per month. Its most important advantage is that if you set a monthly savings target of Rs 3,000, then you can easily save up to Rs 5 lakh without any problem. This scheme offers many benefits like 6.7% fixed interest, money in between, loan facility, option to grow the account after maturity.
Easy to invest
When making an investment plan, everyone’s first question is only the return. Post Office RD is currently offering 6.7% annual interest. Suppose you save Rs 3000 from your income every month or Rs 100 per day and invest it in this scheme. You continue this investment for the next 10 years. During these 10 years, your principal amount will grow to Rs 360,000. At the current interest rate, you will get only Rs 152,565 as interest. Thus, at the end of the 10-year period, you will have a lump sum of Rs 512,565.
This scheme has been designed keeping in mind the convenience of the common man. Any Indian citizen can open a single or giant account. The minimum investment can start from just Rs 100, while there is no maximum limit. You can deposit any amount according to your capacity. Parents can also open this account in the name of their children, thereby securing their future. If the child is above the age of 10, then the account can be opened directly in their name. When the child turns 18, the account can be converted into a regular adult account through KYC documents.
Loan facility in time of need
Financial need never comes up empty-handed. In such a situation, the scheme also allows you to provide interim cash provision. After one year of opening the account, if you have paid 12 consecutive installments, you can withdraw up to 50% of your total deposit as a loan. You will pay only 2% more interest on this loan than the fixed rate. The loan repayment option is available in lump sum or monthly installments. If for any reason you are unable to repay the loan, it will be deducted from the final fund that will be available on maturity of the account.
Maturity Rules
The basic tenure of Post Office RD is 5 years (total 60 months). You can extend it for another 5 years by submitting a simple application after maturity, if you wish. If you do not want to deposit new funds, then the account can remain operational for another 5 years without making new installments. The rules for depositing installments are also very clear. If you have opened your account between the 1st and 15th of the month, then each subsequent installment has to be paid by the 15th of that month. If you have opened your account between the 16th and the last day, then the installment has to be paid by the last working day of the month. If you have to close the account in between, then there is a waiver of premature closure after 3 years. But keep in mind, by closing the account prematurely, you will only get interest as a post office savings account instead of an RD.
