For those looking for a safe and guaranteed way to grow their savings, the Post Office Recurring Deposit (RD) Scheme remains one of the most reliable options in India. Backed by the Government of India, this small savings scheme allows investors to deposit a fixed amount every month and earn interest with complete security. If you save ₹10,000 every month, you can build a handsome corpus of over ₹7.13 lakh in just 5 years.
What is the Post Office RD Scheme?
The Post Office RD is a medium-term savings scheme with a fixed tenure of 5 years. Investors deposit a fixed amount every month, and the amount earns compound interest at a rate declared by the government. Since the scheme is government-backed, it is considered one of the safest investment choices for risk-averse individuals.
Current Interest Rate on Post Office RD
As of 2025, the Post Office RD scheme offers an interest rate of 6.7% per annum, compounded quarterly. This ensures that your monthly deposits grow steadily with guaranteed returns at maturity.
How ₹10,000 Monthly Grows into ₹7.13 Lakh in 5 Years
When you save ₹10,000 per month for 60 months, the total deposits amount to ₹6,00,000. With 6.7% annual interest compounded quarterly, the maturity value becomes approximately ₹7,13,000. This means you earn an interest of over ₹1.13 lakh in 5 years without any market risk.
Maturity Value Table
| Monthly Deposit | Tenure | Interest Rate | Total Deposit | Maturity Value |
|---|---|---|---|---|
| ₹10,000 | 5 Years (60 Months) | 6.7% p.a. | ₹6,00,000 | ₹7,13,000 |
Key Benefits of Post Office RD
The Post Office RD scheme is especially popular among salaried individuals and middle-class families because of its unique advantages. It offers guaranteed returns, flexibility to deposit small amounts starting from just ₹100 per month, and government assurance on safety. Additionally, investors can take loans against their RD balance, making it a practical savings tool.
How to Open a Post Office RD Account
Opening a Post Office RD account is simple and can be done at any post office branch across India. You need to submit basic KYC documents such as Aadhaar card, PAN card, and passport-size photographs. The account can be opened in the name of an individual, jointly with others, or even on behalf of a minor.
Tax Implications
Interest earned on the Post Office RD is taxable under the Income Tax Act, and Tax Deducted at Source (TDS) is applicable if the interest income crosses the specified limit. However, since it offers guaranteed returns, many investors still prefer it as a safe savings option compared to risky instruments.
Final Thoughts
The Post Office RD Scheme is ideal for those who want disciplined savings with secure returns. By investing ₹10,000 every month, you can build a solid ₹7.13 lakh corpus in just 5 years, making it an excellent choice for medium-term financial goals.