There’s a saying our parents often repeat Little drops make an ocean. That’s exactly how the Post Office Recurring Deposit (RD) works. You don’t need to put a huge amount at once instead, you deposit a fixed amount every month, and over time, it quietly grows into a sizeable fund. Now imagine setting aside ₹20,000 every month. It may feel like a disciplined habit today, but in just 5 years, that money transforms into nearly ₹14.27 lakh. Let’s dive into how this magic of compounding actually works.
Why RD Feels Like a Safe Companion
In today’s uncertain world, many people fear the ups and downs of the stock market. For them, RD acts like a safe companion. It guarantees returns, is backed by the government, and allows you to plan your savings without worry.
Currently, the Post Office RD offers an interest rate of 6.7% per annum (compounded quarterly). This means not only do you earn interest on your deposits, but that interest itself starts earning more interest every three months. That’s how your savings snowball into a bigger fund.
Real Calculation: ₹20,000 RD for 5 Years
Here’s how your ₹20,000 monthly saving turns into ₹14.27 lakh in the Post Office RD scheme
| Monthly Deposit | Tenure | Interest Rate | Total Deposit | Maturity Amount | Total Interest Earned |
|---|---|---|---|---|---|
| ₹20,000 | 5 Years | 6.7% (Quarterly Compounded) | ₹12,00,000 | ₹14,27,315 | ₹2,27,315 |
So, you actually save ₹12 lakh in total, but by the end of 5 years, you walk away with nearly ₹14.27 lakh. That extra ₹2.27 lakh is your reward for being disciplined and consistent.
How Families Use RD
RD is popular among families because it feels like a monthly bill that pays you back. Parents often use it to save for school fees, weddings, or even to build a small emergency fund. Young professionals see it as a way to train themselves into saving regularly. Think of RD like filling a jar with ₹20,000 every month. Only this time, when you open the jar after 5 years, it doesn’t just have your deposits it has extra money that kept multiplying silently.
Conclusion
The Post Office RD scheme proves that steady, disciplined savings can create a strong financial base. By saving ₹20,000 every month, you can build a guaranteed fund of ₹14.27 lakh in 5 years. It’s safe, predictable, and a perfect option for those who want growth without taking risks.
Disclaimer
This article is only for educational and general knowledge purposes. Interest rates in Post Office RD may change as per government updates. Please confirm the latest details from official India Post sources or consult a financial advisor before investing.
