A Recurring Deposit (RD) is one of the most popular and safest saving instruments offered by India Post (Post Office). It is ideal for individuals who want to invest a small fixed amount every month and build a lump sum over time. If you begin saving ₹2,400 per month in a Post Office RD account, you can accumulate a sizable amount after 5 years with decent returns and zero risk.
What is a Post Office RD?
The Post Office RD is a government-backed savings scheme that allows individuals to deposit a fixed sum every month for a fixed tenure, typically 5 years. This scheme is perfect for salaried individuals or anyone with a regular income looking for safe investment options with fixed returns.
Investment Details
- Monthly Deposit: ₹2,400
- Tenure: 5 years (60 months)
- Interest Rate: 6.7% per annum (current rate; subject to change quarterly)
- Interest Compounding: Quarterly
- Total Deposits Over 5 Years: ₹2,400 × 60 = ₹1,44,000
The monthly deposit earns interest compounded quarterly, helping your money grow faster than with simple interest.
Maturity Amount Calculation
At the current interest rate of 6.7% per annum, the maturity value of ₹2,400 monthly deposits for 5 years is approximately ₹1,68,000. This includes both the principal amount and the interest earned over the years.
Thus, you will earn nearly ₹24,000 as interest over the 5-year period on your total investment of ₹1,44,000.
Note: This is a rounded estimate. The exact maturity amount may vary slightly depending on the date of account opening and applicable interest rates.
Why Choose Post Office RD?
- Safe Investment: Being backed by the Government of India, there is virtually no risk of loss.
- Attractive Returns: Offers better interest rates compared to regular savings accounts or fixed deposits from some banks.
- Easy to Start: You can open an RD account with just ₹100 per month and increase in multiples of ₹10.
- Discipline in Saving: Monthly deposits cultivate a habit of regular saving.
- Loan Facility: You can avail a loan of up to 50% of your balance after 12 months if needed.
Final Thoughts
Investing ₹2,400 monthly in a Post Office RD account is a smart and secure way to build a corpus of around ₹1.68 lakhs in 5 years without taking any market risk. It is ideal for conservative investors, homemakers, students, or as part of a diversified savings strategy. Given its guaranteed returns and simple process, this scheme is well-suited for long-term financial goals such as emergency funds, education, or travel.
If you stay consistent with your deposits, the Post Office RD can be a powerful tool for disciplined and risk-free wealth accumulation.