Investing small amounts regularly can lead to substantial financial growth over time. One such Post Office scheme allows investors to deposit Rs 200 every day and receive a return of Rs 4 lakh at maturity. This plan is gaining traction among individuals looking for safe, secure, and government-backed investment options.
In this article, we’ll break down how this scheme works, the benefits, eligibility, and a step-by-step calculation of returns.
Understanding the Post Office Investment Plan
The Post Office offers multiple savings schemes, including the Recurring Deposit (RD), Kisan Vikas Patra (KVP), and Time Deposits. For this specific investment plan, two schemes stand out:
1. Post Office Recurring Deposit (RD)
- Offers 6.7% annual interest (compounded quarterly).
- Maturity period: 5 or 10 years.
- Can start with a minimum amount of Rs 100 per month.
- Premature withdrawals allowed after 3 years.
2. Kisan Vikas Patra (KVP)
- Offers 7.5% annual interest (compounded annually).
- Doubles investment in 115 months (9 years, 7 months).
- No monthly deposit required—ideal for lump sum investments.
- Can be encashed early after 2.5 years with a penalty.
How Rs 200 Per Day Grows to Rs 4 Lakh
Let’s break down the calculation using Post Office RD:
Step 1: Monthly Contribution
- Daily investment: Rs 200
- Monthly total: Rs 200 × 30 = Rs 6,000
Step 2: Annual Contribution
- Rs 6,000 × 12 = Rs 72,000 per year
Step 3: Maturity Amount (10 Years)
- With an interest rate of 6.7%, compounded quarterly, the maturity amount for Rs 6,000 per month for 10 years will be approximately Rs 4,00,000.
For Kisan Vikas Patra (KVP):
- If you invest Rs 2.25 lakh in one go (from saved daily deposits), it will double to Rs 4.5 lakh in 115 months.
Additional Benefits and Considerations
1. Inflation Protection
- With rising inflation, keeping money in savings accounts yields lower real returns. Post Office schemes offer better interest rates compared to standard savings accounts.
2. No Market Volatility
- Unlike stocks or mutual funds, these schemes provide fixed returns and are not subject to market risks.
3. Suitable for Retirement Planning
- People looking for long-term financial security can use these schemes to build a corpus for retirement.
4. Auto-Debit Facility
- You can automate monthly RD deposits from your bank account to ensure disciplined investing.
5. Loan Against RD
- You can take a loan against your RD balance if you need funds before maturity, making it a flexible savings tool.
How to Open a Post Office RD or KVP Account
Step 1: Choose the Right Scheme
- If you prefer monthly deposits → Choose Recurring Deposit (RD).
- If you have lump sum savings → Opt for Kisan Vikas Patra (KVP).
Step 2: Visit Your Nearest Post Office
- Carry Aadhaar Card, PAN Card, and passport-size photos.
- Fill out the account opening form and submit required documents.
Step 3: Deposit Money
- For RD: Set up an auto-debit from your bank account.
- For KVP: Make a one-time lump sum deposit.
Step 4: Collect Passbook & Keep Track
- Keep a record of deposits and maturity details.
- Use the India Post online portal for tracking.
(FAQs)
1. Is this Post Office scheme better than Fixed Deposits?
Yes, Post Office RD and KVP generally offer higher interest rates than most bank FDs.
2. Can I withdraw money before maturity?
Yes, but there may be a penalty for early withdrawals, depending on the scheme.
3. Who can open an account?
Any Indian citizen above 18 years (or a guardian for minors) can invest.
4. Is there any tax benefit?
RD investments do not qualify for Section 80C tax deductions, but KVP earnings are taxable as per income slab.
