Retirement Planning: Guaranteed monthly income with RD, FD, and MIS – How much and how to invest?
Retirement planning is very important in today's world. It's crucial to ensure you don't face any financial problems in the future. Today, we'll tell you about a retirement plan that's not just limited to saving money. Through this plan, you'll continue to receive income every month even after retirement.
Earning at Retirement with RD + FD + MIS
First, you need to invest a portion of your salary every month in a Recurring Deposit (RD). Like SIPs, you can deposit money in installments in an RD. An RD is a completely safe investment. It offers guaranteed returns. You can choose a bank for your RD investment according to your preference.
Below is a list of some banks that are offering the highest returns on RDs:
Bank | Interest Rate
State Bank of India | 6% to 7%
ICICI | 4.75% to 7.20%
HDFC | 7% to 7.25%
Kotak Mahindra | 6% to 7.40%
Axis Bank | 5.75% to 7.20%
Source - BankBazaar
If your retirement is approaching, increase the amount you invest every month. We will understand the further process with the help of calculations.
Understanding the Process with Calculations
Let's say a person starts accumulating funds for retirement at the age of 30. If they want to retire at 50, then we have 20 years for investment. We will use three different investment options: first RD, then RD and FD, and finally the Post Office Monthly Income Scheme (MIS).
How will the investment work? Returns | Maturity Amount
First 10 years (Interest rate 6%) | 2,23,494 | 8,23,494
Next 10 years (Interest rate 6%) | 2,23,494 | 8,23,494
Interest on FD (Interest rate 6.95%) | 7,88,889 | 16,12,383
Total | | 32,59,371
We have considered an investment period of 20 years for the calculations. We have assumed a 6% return on the Recurring Deposit (RD). The maturity amount received from the RD in the first 10 years is to be invested in a Fixed Deposit (FD) for the next 10 years. We will also continue investing in the RD for the next 10 years. The monthly investment amount in the RD is Rs. 5000.
In this way, you will be able to create a fund of more than Rs. 32 lakhs for your retirement in just 20 years. Now you can invest half of this amount in the Post Office Monthly Income Scheme. You can invest in this scheme for a period of 5 years.
How much will you earn?
If you invest Rs. 15 lakhs in the Post Office Monthly Income Scheme, you will earn Rs. 9250 every month. You can invest the remaining amount in a Fixed Deposit. The special thing about this plan is that all the investment options we have considered offer guaranteed returns.
Disclaimer: This content has been sourced and edited from Dainik Jagran. 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.
