Post Office Scheme – This scheme of post office has made the account holders happy. Actually, under this scheme, the account holders will get Rs 8.45 lakh instead of Rs 6 lakh.
Recurring Deposit Calculator: Recurring Deposit (RD) is a safe investment option, where now interest is being received like Fixed Income Scheme. In fact, the recurring deposit scheme has become more attractive than before for the September quarter. The government has increased the interest rate on this scheme from 6.2 per cent per annum to 6.5 per cent per annum.
RD is also a financial investment option like FD, but here there is more convenience regarding investment. In FD where you have to invest a lump sum in any scheme. In RD, you can invest on a monthly basis in different installments like SIP. In this, interest is added to your account by compounding on a quarterly basis.
Keep these things in mind-
Interest on RD is added according to compounding. This means that the longer the tenure, the benefit will increase accordingly. That’s why long term goals should be kept while doing RD. In this, it is necessary to open an account with at least 100 rupees. You can deposit any maximum amount every month.
An adult can open a single account in RD. A person can open any number of different RD accounts. Joint account can also be opened by 3 adults together. His parents can open an account in the name of the minor. The scheme can be started in the name of a child above 10 years of age.
5 years maturity, facility to extend up to 5 years-
The maturity period of RD account is 5 years, but it can be extended for another 5 years. For this, information has to be given to the post office before maturity. Premature closure of account can happen after 3 years of account opening. But then you will get interest only according to the interest received on the savings account.
What is the benefit of depositing Rs 5000 every month?
Monthly Deposit: Rs 5000
Tenure: 10 years
Interest rate: 6.5 percent
Amount on maturity: Rs 8,44,940
Total Investment: Rs.6,00,000
Profit: Rs 2,44,940
How interest is calculated
There are different formulas to calculate interest on RD.
If you invest monthly…
M = R [(1+i)n – 1] divided by 1-(1+i)(-1/3)
M: Maturity value of RD
R: Number of monthly installments of RD
n: tenure (number of quarters in total)
I: Rate of Interest/400
If you deposit a lump sum….
A = P(1 + r/n)^nt
A: Final Amount
P: Total amount invested
r: interest rate
n: How many times the interest is compounded in a year
t: Total tenure of RD
