Post Office Scheme: The Post Office offers numerous small savings plans with guaranteed returns. In certain post office schemes, returns are offered in addition to borrowing service. You can take out a loan in addition to receiving assured returns on Post Office Recurring Deposits. You can set aside a little amount of money each month through RD, deposit it, and earn pre-set interest.
Loan Availability Conditions
Loans against post office RD accounts are available to customers. It is required to deposit 12 installments if you are considering taking out a loan against a registered dividend that was opened at the post office. In other words, your RD needs to be a full year old. Only half of the amount in an RD account holder’s account may be lent by the post office.
You have the option of repaying the loan balance in full or in installments. The consumer will pay two percent more in interest than the rate of return on deposit (RD) for this loan obtained from the post office. Assume that if the interest rate on your RD is 6.3 percent, the loan interest rate will be 8.3 percent.
Loan Application Process
You must go to your post office, fill out the loan form, and submit it with your passbook in order to receive a loan on an RD account. Only once all the processes are finished will you receive the loan from the post office.
Important Points
- Annual Rate of Return (Post Office Rate): 6.7% (previous interest rate was 6.5%)
- 7.7% of all National Savings Certificates (NSCs)
- 7.5% of the population is Kisan Vikas Patra (KVP) (mature in 115 months).
- PPF: 7.1%
- 8.2 percent is the Sukanya Samridhi Yojana account.
- Senior Citizen Savings Programme: 8.2%
- 7.4% is the monthly income scheme (Post Office Monthly Scheme).
Investment Scenarios and Returns
You would invest Rs 60,000 in a year and a total of Rs 3,00,000 in five years with a monthly RD of Rs 5,000. After five years, you will receive Rs 56,830 as interest at a rate of 6.7%. At maturity, you will receive Rs 3,56,830.
A monthly investment of Rs 3,000 in RD will yield an annual investment of Rs 36,000. In five years, you will have invested a total of Rs 1,80,000. The post office’s RD calculator indicates that you will receive Rs 34,097 in interest based on the current interest rates. At maturity, you will receive a total of Rs 2,14,097.
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