The Post Office Recurring Deposit (RD) scheme is one of the most assured options when safety and steady returns are paramount in an investment. It is particularly common among middle-class families and risk-averse investors since it is backed by the government’s guarantee and fixed interest. Investing ₹4,000 every month will not only build your savings but also yield an extra ₹45,459 as interest upon maturity.
What is Post Office RD?
It is essentially a small savings instrument where a certain amount is invested every month for a period of 5 years. The interest rates are sure, and it is guaranteed by the Government of India. Hence it is rated among the safest recurring deposits.
How ₹4,000 Grows with RD.
If you invest ₹4,000 in the Post Office RD scheme every month for 5 years, your total investment will be ₹2,40,000. The maturity amount at an interest rate of about 6.7% per annum (compounded quarterly) works out to be approximately ₹2,85,459, which has ₹45,459 as interest in it.
Features of Post Office RD
- Tenure: 5 years (extendable further in blocks of 5 years)
- Minimum investment: ₹100 per month (no upper limit)
- Interest is compounded quarterly for better growth
- Guaranteed by the Government for complete safety
- Premature withdrawal and loan facility available against RD
Benefits of Post Office RD
- Suitable for salaried persons and small investors
- Cultivates the habit of monthly saving
- Safe alternative to market-linked instruments
- May be extended after maturity for further growth
- Assured maturity amount on fixed interest rates
Who Should Invest?
This scheme is, undoubtedly, for those working on disciplined savings with some guaranteed returns. It suits families, retired people, and earners who want to save worry-free about any market fluctuations.
Tax Implications
Interest in Post Office RD is taxable according to the investor’s tax slab. However, with safety guaranteed and assured returns, it is better to risk market investment!
Conclusion
An investment of ₹4,000 monthly in the Post Office RD scheme could help you garner ₹2,85,459 on maturity, including interest of ₹45,459. Also, this scheme being fully secure, and with guaranteed returns makes it a brilliant option for those who want to rely on savings that tend to grow steadily.