Away from the ups and downs of the stock market, if you want guaranteed returns on your money with complete security, then Post Office savings schemes are still the most reliable option. One of these very popular schemes is ‘National Savings Recurring Deposit Account’, which is colloquially called RD. You can start investing in this scheme with just Rs 100 per month. Its biggest feature is that if you set a target of depositing Rs 3,000 every month, then you can easily create a fund of more than Rs 5 lakh without any risk. Many facilities are available in this scheme like fixed interest of 6.7 percent, loan facility in case of need of money in between, option to extend the account after maturity.
This is how a fund of Rs 5 lakh will be created from Rs 100
While planning an investment, everyone’s first question is about returns. At present 6.7 percent annual interest is being given on Post Office RD. Suppose, you save Rs 3,000 from your earnings every month i.e. Rs 100 per day and invest it in this scheme. You continue this investment for the next 10 years. The original amount deposited by you in these ten years will be Rs 3 lakh 60 thousand. According to the current interest rate, you will get only Rs 1 lakh 52 thousand 565 as interest on this. In this way, on completion of the period of 10 years, you will have a total lump sum amount of Rs 5 lakh 12 thousand 565 in your hand. this
Starting an investment is very easy
This scheme has been prepared keeping in mind the convenience of the common man. Any Indian citizen can open a single or joint account in this. Minimum investment can be started from only Rs 100, while there is no limit on maximum investment. If you want, you can deposit any amount as per your capacity. For the secure future of children, parents can also open this account in their name. If the age of the child is more than 10 years, then the account can be opened directly in his name. When the child turns 18, then the account can be converted into a regular adult account through KYC documents.
Loan facility will be available at the time of need
Financial needs never come without warning. In such a situation, this scheme also gives you the facility to arrange cash in between. After one year of account opening, provided you have deposited 12 consecutive installments, you can withdraw up to 50 percent of your total deposit as loan. On this loan, you will have to pay only 2 percent more interest than the fixed interest rate of RD. There is an option to repay the loan in lump sum or monthly installments. If for some reason you are unable to repay the loan, the outstanding amount is deducted from the final funds received on maturity of the account.
Understand maturity rules also
The basic tenure of Post Office RD is 5 years (total 60 months). If you wish, you can extend it for further 5 years by giving a simple application after maturity. Even if you do not want to add new money, the account can be continued for 5 years without depositing new installments. The rules for depositing installments are also very clear. If you have opened the account between 1st and 15th, then every next installment will have to be paid by 15th of the same month. From 16th to the last day of account opening, the installment has to be deposited by the last working day of the month. At the same time, if you have to close the account midway, then there is an exemption for premature closure after 3 years. But keep in mind, if you close the account prematurely, you will get interest only as per Post Office Savings Account instead of RD.
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