Every person saves some amount of their hard-earned money for the future. However, in these times of inflation, simply saving money is not enough; investing it in the right and safe place is equally important. Post office small savings schemes prove to be an excellent option to meet this need. Due to government guarantee, these schemes have zero risk and offer excellent returns. One such scheme is the Post Office Recurring Deposit (RD Scheme), which can transform your small daily savings into a substantial fund in just a few years. The most important feature of this scheme is that you can earn an additional Rs 4.40 lakh from the interest on your deposit alone.

Start your investment journey with just Rs 100

Under the Post Office RD scheme, any Indian citizen aged 18 years or older can open an account at their nearest post office. The most important thing is that investments in this scheme can start with just ₹100. Currently, the government offers an attractive interest rate of 6.7 percent on these deposits.

Premature withdrawal facility

This recurring deposit scheme typically has a maturity period of five years. It's ideal for those with medium-term goals. However, the real investment benefit comes from extending the account for another five years after maturity. Furthermore, investment flexibility is also provided. If an emergency arises that requires urgent funds, account holders can close the account prematurely after three years. If the account holder unfortunately passes away, the nominee named in the documents has the option to either continue the account or claim the deposit amount.

Affordable emergency loan facility

Post Office RDs are not just an investment, but also a cushion for difficult times. After opening the account, account holders are granted the option to take out a loan based on their deposits. As a rule, after one year of regular deposits, you can withdraw up to 50% of your account balance as a loan. This is much more affordable than expensive personal loans available in the market, as the additional interest charged is only 2%.

The math behind saving ₹300 a day to raise ₹15 lakh

Now let's discuss a strategy that can help you build a fund worth lakhs. Suppose you set aside Rs 300 from your daily income every day. This will result in a total monthly savings of Rs 9,000. Deposit this amount into a Post Office RD every month. After five years, your total investment will be Rs 5.40 lakh, and with the interest, this fund will exceed Rs 6 lakh.

If you don't stop this investment and extend it for another five years (a total investment of 10 years), your original deposit will grow to Rs 10,80,000. Upon completion of ten years, you will receive a lump sum of Rs 15,20,889 as maturity. Of this total, Rs 4,40,889 will be interest only.

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