The Post Office Recurring Deposit Account
The Post Office Recurring Deposit Account is a government-certified scheme where you can deposit a small amount in installments. It also gives you better interest rates. The advantages of this scheme are that the minimum amount can be less than Rs 100 to make your investment journey lower and the consideration is no higher limit on investment. You can literally invest as much money as you want.
There is, however, a caveat in this. When you usually open a savings account or a fixed deposit account with a bank, they offer you options for a variety of accommodations. In the case of a Post Office scheme, you may open a Post Office Recurring Deposit account for a fixed period of five years.
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Post Office Recurring Deposit Interest Rate Breakdown
This program is one of the most popular options as it offers an attractive interest rate of 5.8 percent. This is the latest interest rate released by the government and came into effect on April 1, 2020. The Central Government adjusts interest rates on its small savings plans on a quarterly basis. How it works, compound interest is calculated quarterly, making it more effective as it helps investors generate regular revenue.
To highlight the effectiveness of a double deposit investment, consider the following: If you invest Rs 10,000 per month with a current interest rate of 5.8 per cent, and over a period of 10 years that money has combined to give you about Rs 16 lakh in return.
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What is the Catch?
Sometimes things may seem too good to be true, but this time, this is true. The only thing you need to remember is that in order to achieve your goal, you need to invest every month. If for a period you exceed one month or you are overpaid, you will have to pay a one per cent penalty every month. If you miss four consecutive installments, the account will be automatically closed. However, you can still restore the account within 2 months from the default date, but if you miss the window, it will be permanently closed.
It is also noteworthy that this system allows applicants to withdraw 50 percent of their deposit balance annually after the account is opened. In the event that a person allows a place for a rebate on pre-issued deposits, they will face a limit of only six installments.
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Originally published at https://findifsccodeforbank.blogspot.com.
