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If you want to create a big fund in the future by saving a small amount every month, then the Post Office Recurring Deposit (RD) scheme can prove to be a great option for you. Investment in this scheme is safe, returns are assured and with regular installments you can create a fund of lakhs in the long run. The special thing is that by depositing ₹ 15,000 every month in an RD with an interest rate of 6.7%, you can create a huge fund of about ₹ 25 lakh in 10 years.
How to make Rs 25 lakh by depositing Rs 15,000?
If you invest ₹15,000 every month, your fund grows faster with 6.7% annual interest. Your total investment in the first 5 years is approximately ₹ 1.71 lakh. After adding interest, it increases to approximately ₹ 10.71 lakh. If you continue this investment for the next 5 years i.e. a total of 10 years, then on maturity your fund reaches approximately ₹ 25.68 lakh. Here your total investment is around ₹ 7.68 lakh, while due to interest the fund increases more than three times.
How to get such a big return on maturity?
In RD, interest is compounded on the amount deposited every month, that is, new interest is added on the increasing amount every month. The longer period you continue investing, the bigger the returns you get. This is the reason why this scheme creates a big fund by adding your small investments in 10 years.
Why is Post Office RD the first choice of people?
Post Office RD scheme has become the choice of investors who want assured returns without any risk. In this scheme, you can open an account with an amount of only ₹ 100 and invest more as per your capacity. RD has a lock-in of 5 years, but if needed, it can be extended by another 5 years. This is the reason why many families consider RD as the most reliable option for children’s education, marriage or future planning.
Safer option than stock market
There are constant fluctuations in the stock market and mutual funds. In such a situation, RD is suitable for those people who do not want to take risk, want fixed returns and want to create a safe fund in the long term. There is no effect of market in RD, hence both return and maturity are decided in advance.
How to open RD account?
Opening an RD account is quite easy. An account can be opened by going to any nearest post office and submitting Aadhar Card, PAN Card and a passport size photograph. If you want, you can also start joint RD. The first installment can be deposited with just ₹ 100, after which you can increase the amount as per your convenience.
