You can easily build a substantial fund by investing in a Post Office Recurring Deposit (RD). Just commit to depositing a fixed amount each month, and after 5 years, when it matures, you’ll receive a significant sum.
What is Post Office RD?
The Post Office Recurring Deposit (RD) is a great way to save money. You contribute a set amount every month from your salary, and after 5 years, you’ll have a nice amount waiting for you. If you consistently make 12 deposits in the 5-year RD scheme, you can also access a loan. To qualify for this loan, you need to maintain your deposits for at least one year, after which you can borrow up to 50% of the total amount you’ve deposited.
How can you repay the loan?
You have the option to repay the loan either in a lump sum or through equal monthly installments. If you’re unable to repay the loan, the outstanding amount along with any interest will be deducted from your RD account balance upon maturity, and the remaining funds will be credited to your account.
What interest will you pay?
When you take a loan against your RD, you’ll incur an interest charge of 2% on the loan amount, in addition to the interest rate applicable to your RD account. In contrast, personal loans can have interest rates ranging from 10.50% to 24%.
How to apply for a loan?
To apply for a loan, simply fill out the application form and submit it along with your passbook at the post office. Once your application is processed, you’ll receive your loan.