New Delhi: Any investment entails a certain level of risk. People invest in accordance with their financial capabilities. If you don’t want to take chances, post office small savings programmes may be the ideal solution for you. Today, we’re going to inform you about a post office scam with low risk and high profits. Post Office Recurring Deposit is what we’re talking about.

How to start investing in Post Office RD?

The Post Office RD Deposit Account is a government-backed scheme that allows you to deposit modest amounts of money and earn a higher interest rate. You can start investing with as little as Rs 100. There is no maximum amount you can invest; you can put as much money as you wish into it.

This scheme’s account will be open for five years. Banks, on the other hand, provide recurring deposit accounts for six months, a year, two years, and three years. Every quarter, interest is calculated (at an annual rate) on the money deposited in it, and it is credited to your account (including compound interest) at the conclusion of the quarter.

5.8% interest will be available

Currently, a 5.8% interest rate is available on Recurring Deposit Schemes; this new rate will take effect on April 1, 2020. Every quarter, the Indian government sets the interest rates for all of its small savings programmes.

Will get Rs 16 lakh

If you invest Rs 10,000 per month in the post office RD scheme for ten years, you will have accumulated more than Rs 16 lakh at a rate of 5.8%.

Rs.10,000 invested every month

Interest 5.8%

Maturity 10 years

Maturity amount after 10 years = Rs 16,28,963

Important things about RD account

You must continue to deposit money into the account on a regular basis; if you do not, you will be charged a one percent monthly penalty. After four missing instalments, your account will be closed.

Tax on Post Office RD

TDS is deducted from recurrent deposit investments, and if the deposit exceeds Rs 40,000, a 10% annual tax is applied. The interest generated on an RD is taxable, but not the entire maturity amount. Similarly to FDs, investors who do not have any taxable income can claim TDS exemption by completing Form 15G.

Aside from the post office, government and private banks also offer recurring deposit services.

Recurring Deposits of Banks

Bank RD Rates Duration

Yes Bank 7.00% 12 Months to 33 Months

HDFC Bank 5.50% 90/120 Months

Axis Bank 5.50% 5 Years to 10 Years

SBI Bank 5.40% 5 Years to 10 Years

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