Post Office RD– If you want to take a low risk with better returns, then Post Office RD can be a better option for you. Yes, there is no risk of any kind in the Post Office, so it can be called a better investment option.
Small savings schemes of the post office are not only better but invest in it with low cost and earn big money. Today we are going to tell about one of such schemes. One post office scheme is called Post office RD(Recurring Deposit), in this, you get better returns.
India Post, run by the Ministry of Communications, offers 9 small savings investment schemes, which include the Post Office Recurring Deposit Account. These investment schemes are also known as small savings schemes and are backed by the government.
What is Post office RD(Recurring Deposits) Scheme?
You can invest without risk in Post Office RD scheme. Overall, through this scheme you can start investing with very little money. Apart from this, your money will also be completely safe. You can invest in it from Rs 100 rupees per month. Also, there in no maximum limit, you can invest any amount , Post office RD deposit account is a government guarantee scheme of deposit account is a government scheme of depositing small installments with better interest rate.
RD is used as a medium-term investment option and investors opting for Post Office RD need to ensure that their deposits are active for a minimum of 5-year period. Experts suggest investors looking to invest small fixed amounts of money at regular intervals can opt for a 5-year post office RD account. For every Rs 5 of deposit, there is a default fee of Rs 0.05 that is charged. Also, there is no limit on the number of accounts that can be opened. However, after four regular defaults, the account will automatically be discontinued, but one can revive it within two months
Post Office RD Interest Rate
The RD account opened in the post office is for 5 years. Does not open for less then this. Every quarter( at the annual rate), interest is calculated on the deposits. It is then added to your account with compound interest at the end of every quarter. According to the India Post Office Website, 5.8% interest is currently being paid RD scheme. This new rate is applicable from July 1, 2020. The central government has announced interest rates every quarter in all its small saving schemes.
How to Investment In Post Office RD
If you invest 10 thousand rupees every month in RD scheme of post office, that too for 10 years, then it will get 16.28 lakh rupees on maturity. The thing to note is that if you do not deposit the RD installment on time, then 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 month.
Features and Benefits Post Office RD Schemes
- The Post Office RD has the facility of both single account and joint account. A joint account can have a maximum of 3 adults. Names of children above 10 years of age can also be opened by the account guardian under his care.
- Investors are also offered a rebate on advance deposit of at least 6 installments. On deposits made in advance, six months or more from the due date, the rebate is offered to depositors.
- RD’s maturity is 5 years duration, but by applying before maturity, you can extend in for the next 5-5 years.
- Account deposits can be made till the 15th day of next month if the account is opened within 15th of a calendar month. Similarly, deposits can be made up to the last working day of next month if the account is opened between the 16th day and the last working day of a calendar month.
- You can deposit at least 100 rupees per month in RD account and no maximum amount limits. You can invest in this schemes under your situations.
- While a joint account can be opened by two adults, a single account can also be converted into a joint account and vice versa. Also, this scheme offers no tax rebate and the interest is fully taxable.
- Nomination Facility in also available at the time of account opening. After 3 years from the date of opening the account, the facility of pre-matured closure will be available. Interest rates change on a quarterly basis.
- Accounts can be transferred from one post office to another post office. Penalty has to be paid for not depositing on time. It will be 1 rupee per 100 rupees. There is also a facility to take a loan up to 50% of the deposit after one years. Which can be repaid outright with interest. There is also a facility to submit online through IPPB saving accont.
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