Post Office RD vs SBI RD: Where will you get more money after 10 years with a monthly deposit of ₹10,000?

If you wish to build a substantial fund for the future by saving small amounts regularly without risk, a Recurring Deposit (RD) can prove to be an excellent option. Both the Post Office and the State Bank of India (SBI) offer RD facilities. However, since their interest rates differ, the maturity amount also varies.

Let us examine which scheme is likely to yield higher returns over a period of 10 years if you deposit ₹10,000 per month.

Post Office RD Rules
The Post Office RD currently offers an annual interest rate of 6.7%. This interest is compounded on a quarterly basis. The scheme has a standard tenure of 5 years, though investors have the option to extend it beyond maturity. Being government-backed, it is considered one of the safest investment options.

SBI RD Interest Rules
SBI's standard RD currently offers an annual interest rate of 6.5%, with higher rates applicable to senior citizens. Like other RDs, this scheme requires a fixed monthly deposit, and the total amount—including interest—is paid out upon completion of the tenure.

What will the accumulated fund be if you deposit ₹10,000 per month? If a person deposits ₹10,000 every month for 10 years, then—

*   Monthly investment: ₹10,000
*   Total tenure: 10 years (120 months)
*   Total deposited amount: ₹12,00,000

Now, let’s look at the estimated maturity amount for both schemes:

Post Office RD Calculation
*   Monthly investment: ₹10,000
*   Total investment: ₹12,00,000
*   Interest rate: 6.7% per annum

Estimated maturity amount: Approximately ₹17.2 lakh

This means the investor could earn around ₹5.2 lakh in interest.

SBI RD Calculation
*   Monthly investment: ₹10,000
*   Total investment: ₹12,00,000
*   Interest rate: 6.5% per annum

Estimated maturity amount: Approximately ₹17 lakh

This means the investor could earn around ₹5 lakh in interest.

Which offers better returns?
Comparing based on current interest rates, investing in a Post Office RD could yield a maturity amount approximately ₹20,000 to ₹30,000 higher than an SBI RD. The primary reason for this is that the interest rate for the Post Office RD is slightly higher than that of the SBI RD.

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