04/07/2021
--> What is the Recurring Deposit (RD) Scheme, and how it works?
The central government of India runs this scheme, and since it does not depend on the market, it is a risk-free investment unlike mutual funds.
In this scheme, a depositor will have to open an RD account in a post office, of fixed amount (say Rs 5000) and will have to invest that fixed amount (here Rs 5000) every month for next five years, and upon maturity, the depositor will receive Rs 3,48,480 at a 5.8% rate of interest compounded quarterly if invested for Rs 5000 per month. You can open your account with a minimum amount Rs 1000 per month.
--> Benefits of Post Office: Recurring Deposit (RD) Scheme:
1. A depositor can open more than one account with the same name.
2. A depositor can close the Account only after 3 years. Here it doesn't mean that in this five-year scheme depositor will have to invest your money compulsorily for three years. Even if the depositor invests for only one month, then that maturity amount you will get after 3 years.
3. Account can be extended for next five years also. Moreover, the depositor can also do the nomination of their loved ones.
4. Depositor will also get a 4% rebate facility if you are investing annually.
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