Post Office Savings Scheme: Indian citizens, largely across the lower middle class and middle class sections, always rely on savings schemes that guarantee an ensured returns at the time of maturity so that none of their hard-earned money is lost. This is why, they tend to put in their money into schemes that are backed by the government. The post office, in this regard, is a go-to for all those who want to get guaranteed and good returns on their investments. Several savings schemes offered by the India Post are some of the most popular risk-free savings schemes in the country.
Apart from those targetted at particular groups, the post office also provides savings schemes such as Recurring Deposits, where the interest rate is compounded quarterly. The main attraction of the 5-Year Post Office Recurring Deposit Account is that you can open it on your child’s name and thereby secure a good future for him or her. All you need to do is be listed as their legal guardian to open the Recurring Deposit account at the post office. As the name suggests, the maturity period of this scheme is five years.
The scheme, with its good rate of interest, is a popular option among parents who want to save money for their kids’ future.
Post Office Recurring Deposit Calculator
To get a good return out of this scheme, all you have to do is deposit Rs 70 every day in the RD account opened on your child’s name. This means that you deposit a monthly amount of Rs 2,100 to the account. At the end of five years, you would have saved Rs 1,26,000 in the account.
On top of this, you would have earned interest on the amount you deposited, which is compounded quarterly. The post office offers an interest rate of 5.8 per cent on its Recurring Deposit accounts from April 2020. This means, over five years, the interest would amount to over Rs 20,000 under the scheme. So, if we calculate the total money, your child will get a return of Rs 1,46,000 after five years, which is almost equal to Rs 1.5 lakh.
Key Features of Post Office Recurring Deposit Account
Eligibility: Any Indian adult can open a single account or a joint account of up to three adults under this scheme. Apart from this, a guardian on behalf of minor, a guardian on behalf of person of unsound mind, and a minor above the age of 10 can open the account on his or her own name.
Account Limits: Minimum Amount for monthly deposit is Rs 100 and above minimum in multiple of Rs 10, the India Post said on its website. There is no upper limit for this account.
Other Features: One can close this account prematurely after three years of continuous deposits, but the interest calculated in that case would be the same as that of the savings account. On the other hand, the tenure of this account can be extended to another five years.
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Source: News18