For investors who want to make small, disciplined savings every month and grow their money over a fixed period with safe and assured interest, the Post Office has the National Savings Recurring Deposit Scheme. This is an excellent government savings scheme operated by the Indian Postal Department (India Post).
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Post Office Scheme: The National Savings Recurring Deposit (NSD) scheme at the post office is a reliable and secure savings scheme run by the Indian Postal Department. This scheme is ideal for those who want to invest a small amount every month and earn good returns over a fixed period. Regular monthly savings, along with quarterly compounding and a government guarantee, make this scheme unique. This scheme is especially suitable for working professionals, housewives, senior citizens, and children who want to plan for a secure future with minimal risk.
Understand the Scheme
Eligibility: Any Indian citizen (individual, joint account, or by guardian in the name of a minor).
Minimum deposit: Only ₹100 per month (thereafter in multiples of ₹10). There is no maximum deposit limit.
Deposit period: 5 years (60 months), this period is fixed.
Interest rate: 6.7% per annum (until September 2025). Most importantly, interest is calculated on a quarterly compounding basis, which increases your returns exponentially.
Best time to deposit: On or before the 15th of every month.
Loan facility: After 1 year of account opening, you can avail a loan up to 50% of the deposit amount.
Tax benefits: There is currently no tax exemption available on this scheme (it is not covered under Section 80C).
₹1,13,658 Guaranteed Return on ₹10,000 Monthly Investment
If you invest ₹10,000 monthly in the Post Office RD scheme, according to calculations, you will receive a guaranteed return of ₹1,13,658 at maturity, i.e., after 5 years. According to calculations, you invest a total of ₹6,00,000 in five years, which will yield a return of ₹1,13,658 as interest. This means you will have a total corpus of ₹7,13,658.29.
Important Terms and Features
Monthly Deposit Default: If you fail to deposit money in any month, a penalty of ₹1 will be charged for every ₹100.
Account Revival: A maximum of 4 consecutive defaults are allowed. If there are four consecutive defaults, the account may be closed, but you have the option to reactivate it.
Premature Closure
You can close your account after three years have passed. If you close it before three years, you will receive interest at the same rate as a Postal Savings Account, but at a lower rate. Children above 10 years of age can open and operate their own account. For younger children, the account can be opened by their guardian.
