Calculation of Post Office Recurring Deposits for Monthly Amounts of Rs. 1000, Rs. 5000, and Rs. 10,000: The Centre has increased the interest rate on the five-year Post Office Recurring Deposit (RD) scheme by 20 basis points (bps) to 6.7 percent for the October-December 2023 quarter. This scheme allows a minimum monthly investment of Rs 100 or any multiple of Rs 10. The maximum amount you can invest in this scheme is not limited.
After 60 monthly deposits, the Post Office RD scheme’s deposits mature after five years from the date of account opening. According to the Post Office website, account holders can extend their account by an additional five years by submitting an application at the relevant post office.
Post Office RD computation for monthly contribution of Rs 5,000
A five-year corpus of Rs 3.56 lakh can be obtained with a monthly contribution of Rs 5000 to the Post Office RD scheme, according to calculations. In ten years, the total corpus will be Rs 8.54 lakh if you extend the account for an additional five years.
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Post Office Recurring Deposit calculation for Rs 1000/ monthly contribution
According to calculations, if a person contributes Rs 1000 per month to the Post Office RD scheme, in five years their corpus will grow to Rs 71,336. In ten years, the total corpus will be Rs 1.70 lakh if you extend the account for an additional five years.
Post Office Recurring Deposit calculation for Rs 10000/monthly contribution
Based on calculations, if one contributes Rs 10,000 per month to the Post Office RD scheme, after five years the corpus will be Rs 7.13 lakh. The total corpus in ten years, if you extend the account for an additional five years, will be Rs 17 lakh.
Who can open Post Office RD account?
A Post Office RD account may be opened by an adult, jointly with up to three other adults, or by a minor who is older than ten. The default fee per Rs 100 is Re 1 if the depositor misses the next required deposit for a month. The account is closed following four consecutive defaults.
The interest rate that applies to the extended account is the same as the one that was in place when it was first opened. During the duration of the extension, depositors are free to close the extended account whenever they choose. The RD interest rate will apply for each year of an extended account that has been completed. However, the Post Office website states that the interest rate on an extended account will be the same as a savings account for a duration of less than a year.
Read also: Post Office Monthly Income Scheme: Features & Interest Rate
Banks offer better RD rates
Right now, the Post Office RD rate is lower than the RD interest rates offered by top banks. For example, HDFC Bank offers General Citizens an interest rate of up to 7%, while SBI offers an RD rate of up to 7.1%. Moreover, banks permit RDs with shorter terms of one to five years.
5-year RD rates compared: Post Office vs SBI vs HDFC Bank
Post Office- 6.7%
SBI- 6.50%
HDFC Bank- 7%
Post Office RD vs SBI RD vs HDFC Bank RD: Maturity
SBI recurring deposits have maturity ranging from 1 year to 10 years. HDFC Bank offers RD ranging from six months to 120 months (10 years). Post Office offers RDs for a tenure of 5 years only.
An SBI or HDFC Bank RD account can be opened by cheque/cash, but an RD account in a Post Office can be opened by cash only
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