Post Office Superhit Scheme: The Ministry of Finance has announced adjustments in the interest rates for small savings schemes for the July-September quarter. Notably, the interest rates for the 5-year recurring deposit scheme offered by post offices have witnessed a substantial increase of 30 basis points, making it more appealing for medium-term investors.
Revised Interest Rates:
Post this revision, the interest rate on post office recurring deposits will now stand at 6.5 percent, up from the previous 6.2 percent. Additionally, the interest rates on time deposits for 1 year and 2 years have seen an increment of 10 basis points.
Key Features of 5-Year Recurring Deposit:
- Annual interest rate: 6.5 percent
- Compounding: Quarterly compounding
- Minimum deposit: Rs 100, and multiples of Rs 100 thereafter
- Duration: 5 years (extendable for another 5 years with the benefit of old interest rates during the extension)
Potential Returns for Investors:
For an investor depositing Rs 10,000 every month, the Post Office RD Calculator suggests a maturity amount of Rs 7.10 lakh after five years. The total deposited capital amounts to Rs 6 lakh, with an interest share of approximately Rs 1.10 lakh.
Deposit Installment Deadlines:
- Account opened between 1st-15th: Deposit by the 15th of each month
- Account opened after the 15th: Deposit by the last day of every month
Loan Facility and Early Closure:
After depositing 12 installments, individuals can avail a loan facility with an interest rate 2 percent higher than the RD account interest rate. If the account is closed even one day before the completion of 5 years, only the benefit of savings account interest (currently 4 percent) will be provided.
Investors are advised to be mindful of the deadlines for installment deposits to maximize returns, and the benefits of compounding, in this medium-term savings scheme.