Post Office Small Savings Schemes have always been the most reliable medium for middle-class families and salaried class looking for safe and risk-free investments. The 5-year National Savings Recurring Deposit (RD) scheme of the Indian Postal Department is an ideal option for investors who want to save disciplinedly every month rather than investing a large lump sum. The biggest feature of this scheme is that it provides full Sovereign Guarantee of the Government of India on the deposited capital, due to which the fluctuations of the stock market do not affect it.

Currently, 6.7% annual interest rate is being given on 5-year RD of Post Office, which is calculated every three months (Quarterly Compounding). Due to quarterly compound interest, the real return on investors' capital is much higher than simple interest. If a person saves just ₹ 300 from his daily waste and deposits it regularly in this scheme, then in 5 years he can earn a net income of more than ₹ 1 lakh only in the form of interest.

If you save ₹300 every day, your total savings amount in a month (30 days) becomes ₹9,000. When you deposit this amount of ₹9,000 in a post office RD account continuously for 5 years (60 months), the math of compounding works like this:

Thus, on completion of the period of 5 years, the government adds an additional interest of ₹ 1,02,230 on the principal amount of ₹ 5.40 lakh deposited by you and hands over a total fund of more than ₹ 6.42 lakh to you.

1. 
   

   Starting from just ₹100: This account can be opened with a minimum of ₹100 per month and thereafter any amount can be deposited in multiples of ₹10. There is no limit on maximum deposit.

   
   


2. 
   

   Great loan facility: After 1 year of account opening (12 installments deposited), the depositor can take up to 50% of his total balance as loan.

   
   


3. 
   

   Premature closure exemption: After 3 years of opening the account, it can be closed in case of emergency, however, in such a case, the same interest rate as Post Office Savings Account is applicable.

   
   


4. 
   

   Account Extension Facility: After completion of the tenure of 5 years, if you wish, you can extend this account for next 5 more years at the same old interest rate by applying in the concerned post office.

   
   


5. 
   

   Joint and Minor Account: This account can be opened as a single, joint account of 3 adults or by parents in the name of children above 10 years of age.

   
   

It is very easy to open an RD account in the post office. You can open an account by filling Form-1 by visiting your nearest post office branch. If you already have an India Post Payments Bank (IPPB) account and mobile banking app, you can open an RD account online from the comfort of your home and set up auto-debit. For this, identity card (Aadhar card or Voter ID), residence certificate, PAN card and 2 passport size photographs are required.

If you want to create a corpus for the future with guaranteed returns without any risk, this 5-year RD scheme from Post Office offers the best combination of capital protection and fixed profits.