In the era of the coronavirus epidemic, the importance of every small savings is understood. Especially investors who are able to save up to two thousand or five thousand in a month. The most important thing for them is to invest money in a place where guaranteed returns are given in a given time and money is also 100 percent safe. Post office i.e. the Recurring Deposit (RD) of the post office is one such option, where you will get a fixed interest on your deposit, along with the money will be completely safe. Because, there is sovereign guarantee of the Government of India on the deposit of the post office, while only a maximum of 5 lakhs are safe on deposits in banks. In this way, you can make millions of funds by investing small savings every month.
The recurring deposit of the post office is one such scheme, which promotes small savings. By the way, its maturity is 5 years, but you can extend it even further for 5-5 years by applying. A minimum of 100 rupees has to be deposited in the post office RD every month. The deposit should be in multiple of Rs. There is no maximum investment limit.
3.48 lakhs to be made in 5000 to 5 years
Suppose an investor invests Rs 5000 in the RD of the post office every month for 5 years, then he will get Rs 3.48 lakh on maturity. In fact, at present the RD of the post office is currently getting 5.8 percent interest annually. Compounding of interest is done on quarterly basis.
Feature of Post Office RD Scheme
- Post office RD has 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 supervision.
- RD’s maturity is 5 years, but by applying before maturity you can extend it for the next 5-5 years.
- You can deposit at least 100 rupees per month in RD account and maximum amount in multiples of 10.
- Nomination facility is also available at the time of account opening.
- After 3 years from the date of opening the account, the facility of pre-mature closure will be available. Interest rates change on a quarterly basis.
- The account can be transferred from one post office to another.
- 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 percent of the deposit after one year. Which can be repaid outright with interest.
- There is also a facility to submit online through IPPB saving account.
Why is the post office more secure than the bank?
Post office savings schemes are more safe for small savings investors. This is because if the postal department fails to return the amount, then there is sovereign guarantee on the deposited money of the post office. That is, if the postal department fails to return the investors’ money, then the government goes ahead and guarantees the investors money. In some situation your money is not trapped. The money used in the post office scheme is used by the government for its works. For this reason, the government also gives guarantee on these money.
On the other hand, your entire deposit capital kept in the bank is not 100 percent safe. If a bank defaults, then in that case the DICGC i.e. Deposit Insurance and Credit Guarantee Corporation guarantees just Rs 5 lakh security to the customers in the bank. This rule applies to all branches of the bank. This includes both principal and interest. That is, if there is more than 5 lakhs by adding both, then only 5 lakhs are considered safe.