In 2023, the government gave a big boost to investors by revising the interest rates of the Post Office Recurring Deposit (RD) Scheme. This revision applied to the October-December 2023 quarter. The scheme currently offers an attractive annual interest rate of 6.7%, which is subject to quarterly review.

If you're looking for a risk-free way to grow your savings, the Post Office RD Scheme could be the ideal option. This small savings scheme is highly popular and allows you to build a substantial corpus with minimal monthly contributions. By investing just ₹5,000 per month, you can accumulate ₹8,54,272 over 10 years. Additionally, this scheme offers the convenience of easy loan accessibility.

How ₹5,000 Monthly Turns into ₹8 Lakh

The process is simple:

1. Initial Investment for 5 Years
   If you contribute ₹5,000 monthly into the Post Office RD Scheme, your total investment over five years will be ₹3,00,000. With the 6.7% annual interest rate, the interest earned during this period would amount to ₹56,830. This brings your total maturity value to ₹3,56,830 after five years.

2. Extension for Another 5 Years
   You can extend your RD for another five years. By doing so, your total contributions over 10 years will amount to ₹6,00,000. The interest earned over this extended period, calculated at the same rate, would be ₹2,54,272. This makes the total maturity amount ₹8,54,272 after 10 years.

Additional Benefits of Post Office RD Scheme

1. Flexible Loan Facility
   After maintaining your RD account for one year, you can avail of a loan of up to 50% of your total deposit. However, the loan interest rate will be 2% higher than the RD interest rate.

2. Early Withdrawal Option
   While the maturity period for this scheme is five years, you can close your RD account prematurely if needed.

3. Low Initial Deposit
   You can open an RD account with just ₹100 at any nearby post office, making it an accessible investment option for everyone.

This Post Office scheme combines the security of government-backed savings with the potential for consistent growth. If you're looking for a simple yet effective way to accumulate wealth over time, this plan is worth considering.