If you invest 10 thousand rupees every month in the post office RD scheme for 10 years, then after 10 years you will get more than 16 lakh rupees at the rate of 5.8%. Know the complete calculation.
New Delhi: Generally, any investment has a risk factor attached to it. That is, everyone wants them to make a safe investment where their money is secure. Also, get better returns with less risk. As the risk is high in the equity market, the returns are also higher than other investment products. But not everyone has the ability to take risks. In such a situation, if you want an investment where there is profit and there is no risk, post office is better for you.
If you are also one of those people who do not want to take risk then small savings schemes of the post office can be the best option for you. Let us tell you an investment in which the risk is negligible and the returns are also good. Post Office Recurring Deposit is one of them an investment avenue.
How to start investing in Post Office RD
Post Office RD Deposit Account is a government guaranteed scheme of depositing small installments with better interest rate, in this you can start investing with a small amount of just Rs 100.
There is no maximum investment limit, you can invest as much money as you want.
The account for this scheme is opened for five years. However, banks offer the facility of recurring deposit accounts for six months, 1 year, 2 years, 3 years. Interest is calculated every quarter (at annual rate) on the deposited money and it is added (including compound interest) to your account at the end of every quarter.
Know how much interest you will get
At present, interest of 5.8% is being available on Recurring Deposit Scheme, this new rate is applicable from 1st April 2020. The Government of India fixes the interest rates of all its small savings schemes every quarter.
If you put 10 thousand every month, you will get 16 lakhs
If you invest 10 thousand rupees every month in the post office RD scheme for 10 years, then after 10 years you will get more than 16 lakh rupees at the rate of 5.8%.
Investment every month 10,000 rupees
Interest 5.8%
Maturity 10 years
Maturity amount after 10 years = Rs 16,28,963
Important things about RD account
You will have to keep depositing money regularly in the account, if you do not deposit the money then you will have to pay a penalty of one percent every month. Your account is closed after 4 installments are missed.
Tax on Post Office RD
TDS is deducted on investment in recurring deposits, if the deposit exceeds Rs 40,000 then tax is levied at the rate of 10% per annum. Interest earned on RD is also taxable, but the entire maturity amount is not taxed. Investors who do not have any taxable income can claim TDS exemption by filing Form 15G, as is the case with FDs.
Apart from the post office, government and private banks also provide the facility of recurring deposit.
Recurring Deposits of Banks
| Bank | RD Rates | Duration |
| Yes Bank | 7.00% | 12 Months to 33 Months |
| HDFC Bank | 5.50% | 90/120 Months |
| Axis Bank | 5.50% | 5 Years to 10 Years |
| SBI Bank | 5.40% | 5 Years to 10 Years |
