Post Office Recurring Deposit Account
Post Offices in India like the various banks offer recurring deposits. We need to first understand what a recurring deposit means. A recurring deposit is basically a fixed deposit (FD), with a very little difference in the way it works. Here, you make a fixed investment every month instead of making a one-time lump sum investment. This monthly investment will earn you some fixed rate of interest and at the end of your recurring deposit tenure; you will get back the amount (principal) that you had invested along with the earned interest on it. You make periodic equal payments and in return get it back with interest at the time of maturity. Recurring deposit is considered to be one the best available options for investors who have low income. Many people who stay mostly in the rural areas where there are fewer banks available prefer to open a Post Office Recurring Deposit Account.
Given below are details of the post office recurring deposit account which all the Post Offices in India offer.
Duration:
5 –Year Post Office Recurring Deposit Account can be opened.
Extension of Account:
After the 5 initial years get over, you can extend the account by 5 years as many numbers of times you want to. This means, that on maturity, you can continue with the account for another 5 years.
Rate of Interest Offered:
The interest rate earned in the recurring deposit account is 7.5% per annum, and it is compounded ever quarter (3 months)
Investment Amount
The amount deposited every month is called as the ‘Denomination’ of the recurring deposit account. At the time of opening the account this denomination is fixed, and it remains the same during the whole term of the recurring deposit account. The minimum amount that needs to be monthly deposited is Rs. 10; no upper limit is set. Also note that the interest rates and other details are written at the prevailing rate and it may vary from time to time. Check the post office of India website for more details.
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if i continue my PO RD of Rs1000/p.m for another 5 years after completion of 60 instalments, what will be maturity amount in next 5 years?