Post office saving scheme: There is a post office scheme that assures long-term wealth generation without any risk. This scheme—the Post Office Recurring Deposit scheme — is not only safe but gives you long-term wealth appreciation by investing as little as just Rs 100 per month.

It also offers the facility of both single account and joint account. A joint account can have a maximum of three adults. Names of children above 10 years of age can also be opened by the account guardian under his care. RD’s maturity is five years, but by applying before maturity, you can extend it for the next 5 years. There is no maximum limit to the amount that can be invested. Post office RD deposit account is a government guarantee scheme of depositing small installments with a better interest rate.

Post Office Recurring Deposit: How to invest money: Post office saving scheme

The Post Office Recurring Deposit Account is a government-guaranteed scheme of depositing small amounts in installments with better interest rates. In this scheme, you can start investing with a small amount of just Rs 100. Moreover, there is no maximum investment limit, you can invest as much money as you want. 

It must be noted that the Post Office Recurring Deposit account can be 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 an annual rate) on the deposited money and it is added (including compound interest) to your account at the end of every quarter.

Post Office Recurring Deposit: Know the interest rate

At present, the Post Office Recurring Deposit scheme offers an interest of 5.8%. This new interest rate is applicable from April 1, 2020. The Central government has fixed 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 RD scheme of the post office, that too for 10 years, then it will get 16.28 lakh rupees on maturity. The point to note is that if you do not deposit the RD installment on time, you will have to pay a fine. If the installment is delayed, you will have to pay a penalty of one percent every month. With this, if you do not deposit 4 consecutive installments, then your account will be closed. However, once the account is closed, it can be activated again for the next 2 months.

Bank Recurring Deposit  Bank RD Rates Tenure  

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.