Small monthly savings, if invested in the right place, can build a substantial fund over a few years. If you can save around ₹300 daily, it amounts to approximately ₹9,000 per month. Depositing this amount into a 5-year Post Office Recurring Deposit (RD) scheme could result in a corpus of around ₹6.42 lakh upon maturity.

How much will be deposited in 5 years?
A Post Office Recurring Deposit (RD) requires a fixed amount to be deposited every month. Currently, the 5-year Post Office RD offers an annual interest rate of 6.7%, compounded quarterly.

If you deposit ₹9,000 every month, the calculation looks like this:
Monthly deposit: ₹9,000
Tenure: 5 years (60 months)
Total deposit: ₹9,000 × 60 = ₹5,40,000
Interest rate: 6.7% per annum
Estimated interest: Approx. ₹1,02,292
Maturity amount: Approx. ₹6,42,292
In other words, over 5 years, you will deposit ₹5.40 lakh of your own money, and approximately ₹1.02 lakh will be added as interest.

What does saving ₹300 daily mean?
Saving ₹300 daily translates to about ₹9,000 per month. However, money in an RD is deposited as a fixed monthly installment rather than on a daily basis. Therefore, if your goal is to save ₹300 a day, you can set aside ₹9,000 each month to pay the RD installment.

With what amount can you start?
You can start investing in a Post Office RD with a small amount. According to official information, a minimum of ₹100 per month can be deposited in an RD, and the amount can subsequently be increased in multiples of ₹10. There is no fixed upper limit on the deposit amount. The standard tenure is 5 years, with the option to extend it further.

What about the safety of funds?
The Post Office RD is part of the government's small savings schemes. Therefore, it serves as a suitable option for individuals who prioritize fixed interest and regular savings over market-linked investments.

Please note that the 6.7% interest rate is not fixed indefinitely; the government reviews interest rates for small savings schemes on a quarterly basis. Hence, it is advisable to check the applicable rate when opening a new account.

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