Every person saves some amount of his hard-earned money for the future. However, in this era of inflation, just saving money is not enough, but it is equally important to invest that money in the right and safe place. To fulfill this need, small savings schemes of the post office prove to be an excellent option. Due to government guarantee, there is zero risk in these schemes and the returns are also excellent. One such scheme is Post Office Recurring Deposit (Post Office RD Scheme), which can convert your small daily savings into a big fund in a few years. The most important thing about this scheme is that you can earn additional Rs 4.40 lakh only through interest on your deposit.
Start your investment journey with just Rs 100
Under the Post Office RD Scheme, any Indian citizen, who is 18 years of age or above, can open this account by going to their nearest post office. The biggest thing is that investment in this scheme can be started with just Rs 100. At present the government is giving attractive interest at the rate of 6.7 percent on this deposit.
Premature withdrawal facility
Generally the maturity period of this recurring deposit scheme is five years. This is best for those who are pursuing medium term goals. But, the real benefit of investment comes when you extend this account for another five years after maturity. Apart from this, flexibility in investment is also given. If there is a dire need of money in an emergency, then the account holder can close it pre-maturely after completion of three years. Unfortunately, if the account holder passes away, the nominee mentioned in the documents has the option to either continue the account or claim the deposited amount.
Cheap loan facility in case of emergency
Post Office RD is not only an investment but also a support in difficult times. After one year of opening the account, account holders get the facility to take loan on the basis of the deposited amount. According to the rule, after one year of regular deposit, you can withdraw up to 50 percent of the total amount in your account as loan. It is much easier than the expensive personal loans available in the market, because the additional interest charged on it is only 2 percent.
Mathematics of raising 15 lakhs by saving ₹ 300 daily
Now let’s talk about the strategy by which you can create a fund worth lakhs. Suppose you keep aside Rs 300 every day from your daily earnings. According to this, your total savings in a month will be Rs 9,000. Deposit this amount every month in post office RD. After completion of five years, your total investment will be Rs 5.40 lakh and after adding interest, this fund will cross Rs 6 lakh.
If you do not stop this investment here but extend it further for the next five years (i.e. total investment of 10 years), then the original amount deposited by you will become Rs 10,80,000. On completion of ten years, you will get a lump sum amount of Rs 15,20,889 as maturity. Of this total amount, Rs 4,40,889 will be of interest only.
Also read- These banks are giving 8% interest on FD, will RBI increase the interest rate in MPC?