Post Office Investment Scheme: By investing Rs 10,000 in this scheme of post office, you can get Rs 16 lakh on maturity.
Post Office Investment Scheme: Risk associated with any investment is a big factor. In such a situation, everyone wants to invest in such a place, where his money is safe and he also gets good returns. The risk is high in the equity market, hence the returns are also higher as compared to other investment products. But not everyone has the ability to take risks. Therefore, if you want such an investment, where there is good profit, then Post Office Schemes are very good for you.
Post office small savings schemes can be the best option for people looking for safe investment options. It has low risk factor and good returns.
Post Office RD Deposit Account is a government guaranteed scheme of depositing small installments with better interest rates. In this, you can start investing with a small amount of just Rs 100. There is no maximum investment limit, you can invest as much money as you want.
The account for this scheme is opened for five years. However, banks offer the facility of recurring deposit accounts for six months, 1 year, 2 years, 3 years. Interest on the deposited money is calculated every quarter (at annual rate) and is added to your account (including compound interest) at the end of every quarter.
At present an interest of 5.8 percent can be availed on the Recurring Deposit Scheme, this new rate is applicable from 1st April 2020. The Government of India fixes the interest rates of all its small savings schemes every quarter.
If you invest Rs 10,000 every month in Post Office RD scheme for 10 years, you will get more than Rs 16 lakh after 10 years at the rate of 5.8%.
It is worth noting that you have to keep depositing money regularly in the account, if you do not deposit money then you will have to pay a penalty of one percent every month. Your account is closed after 4 installments are missed.
TDS is deducted on investment in recurring deposits, taxed at the rate of 10% p.a. if the deposit amount exceeds Rs.40,000. Interest earned on RD is also taxable, but the entire maturity amount is not taxable. Investors who do not have any taxable income can claim TDS exemption by filing Form 15G, as is the case with FDs.
