Investment: SBI RD or Post Office RD? Just one decision could yield a benefit of over ₹12,000...
If you wish to earn safe and guaranteed returns by investing a fixed amount every month, a Recurring Deposit (RD) can be an excellent option. Unlike mutual funds or the stock market, an RD is not affected by market fluctuations and offers assured returns on your investment.
If you deposit ₹10,000 every month for a period of 5 years, both a Post Office RD and a State Bank of India (SBI) RD can help you build a substantial corpus. However, due to differences in interest rates, the maturity amount received at the end of the term will vary.
**Post Office RD vs. SBI RD**
| **Particulars** | **Post Office RD** | **SBI RD** |
|---------------------------|--------------------|-----------------|
| **Interest Rate** | 6.7% per annum | 6.05% per annum |
| **Monthly Investment** | ₹10,000 | ₹10,000 |
| **Tenure** | 5 Years | 5 Years |
| **Total Investment** | ₹6,00,000 | ₹6,00,000 |
| **Estimated Maturity Amount** | ₹7,13,659 | ₹7,01,557 |
| **Total Interest Earned** | ₹1,13,659 | ₹1,01,557 |
**Which RD Offers Higher Returns?**
Based on current interest rates, investing in a Post Office RD would yield approximately ₹7.14 lakhs after 5 years, whereas an SBI RD would yield around ₹7.02 lakhs. Thus, by choosing a Post Office RD, an investor could receive approximately ₹12,100 more compared to an SBI RD. However, this calculation is based on prevailing interest rates; the actual returns may change if interest rates fluctuate in the future.
**What is an RD Account?**
A Recurring Deposit (RD) is a savings scheme in which you deposit a fixed amount every month. Upon the completion of the stipulated tenure, you receive the total deposited amount along with the accrued interest. **Key Features of Post Office RD**
* An account can be opened with a minimum monthly deposit of just ₹100.
* There is no upper limit on the investment amount.
* The account has a tenure of 5 years.
* If needed, the account can be closed prematurely after 3 years.
* However, if the account is closed before the completion of the 5-year tenure, the interest rate applicable to a savings account may be applied instead of the standard RD interest rate.
**Key Features of SBI RD**
* An RD account at SBI can also be opened with a minimum monthly deposit of ₹100.
* A penalty is levied if the monthly installment is not deposited on time.
* The account may be closed prematurely if six consecutive installments are missed.
* For RDs with a tenure of up to 5 years, a penalty of ₹1.50 per month is charged for every ₹100 of the monthly installment.
Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
