The Post Office Recurring Deposit (RD) scheme offers a great opportunity for small savers looking for a safe investment avenue with a government guarantee. By depositing a small amount every month with discipline, you can earn good returns. At the current interest rate, if you invest Rs. 6,000 per month for five years, you can receive approximately Rs. 4.28 lakhs at the time of maturity.

Calculation like this..
Currently, the annual interest rate on Post Office RD is 6.7 percent. This interest is calculated every three months on a compound interest basis. If you deposit Rs. 6,000 per month for 5 years (60 months), your total investment will be Rs. 3,60,000. You will get approximately Rs. 68,000 interest on your investment for this period. With this, you will receive a total of Rs. 4,28,000 at the time of maturity.

Scheme Details
The tenure of this scheme is five years. It is very suitable for employees who draw monthly salaries, small traders and those who want to save regularly. This account can be opened with a minimum of Rs. 100. There is no limit on the maximum deposit.

It is important to pay the installments by the due date every month. In case of delay, a nominal fee will have to be paid. There is a facility to withdraw the money early (premature closure) in case of emergency after three years of opening the account. However, if you do so, there is a possibility of some cut in the interest. It should be noted that tax is applicable on the interest earned through this scheme as per the income tax slab of the investor.

Since the government reviews the interest rates from time to time, financial experts suggest that it is better to contact your nearest post office and know about the latest interest rates and complete terms before opening the account.