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If you wish to build a substantial fund for your daughter by saving small amounts regularly, there is a Post Office scheme that can help you accumulate ₹4 lakh. It does not require a large lump-sum investment; instead, you deposit a fixed amount every month. Currently, this scheme offers an annual interest rate of 6.7%. A key advantage is that you can start with a small amount.

The Post Office Recurring Deposit (RD) scheme is an excellent option for those who want to set aside a portion of their salary or earnings each month for their daughter. The investment tenure is typically 5 years, and regular deposits can result in a significant corpus upon maturity.

**With how much money can you open an RD account?**
A Post Office RD account can be started with a minimum monthly deposit of ₹100. Subsequently, the amount can be increased in multiples of ₹10. There is no upper limit on the deposit amount; this means you can decide the monthly contribution based on your savings and requirements.

You must deposit the specific amount you initially choose every month. Therefore, it is advisable to select a monthly installment amount that you can easily sustain over the long term.

**When will you get ₹4 lakh?**
The standard tenure for a Post Office RD is 5 years (60 months). For instance, if a person deposits ₹6,000 per month, the total deposited amount over 5 years would be ₹3.60 lakh.
Based on an interest rate of 6.7%, the investment could earn approximately ₹65,947 in interest. Consequently, the total maturity value could be around ₹4,25,947. The actual amount will be determined according to applicable rules and interest calculations.

Understand the calculation:
Investment Amount
Daily investment: ₹200
Monthly investment: ₹6,000
Interest rate: 6.7% per annum
Investment tenure: 5 years
Total deposited amount: ₹3,60,000
Earnings from interest: ₹65,947

What happens if there is a delay in depositing the installment?
It is essential to deposit the RD installment on time every month. If an installment is missed in a particular month, it can be deposited later as per the rules, though a penalty fee for the delay may apply.

If up to four installments are missed, the facility to continue the account by depositing the outstanding installments may be available. However, failing to deposit a larger number of installments could lead to the account being closed. Therefore, it is best to deposit the monthly installment on time.

Loan available after one year.
If the RD account has been active for at least one year and 12 installments have been deposited, the account holder may avail of a loan facility based on the deposited amount. Under the rules, a loan of up to 50% of the deposited amount can be taken. The interest rate on the loan may be higher than the interest earned on the RD; therefore, it is important to understand the cost and repayment terms before taking a loan.

Can the account be closed prematurely?
The standard tenure of an RD is 5 years, but the account can be closed prematurely after the completion of 3 years, subject to certain conditions. In such a case, the interest earned may be calculated based on the applicable savings account rate rather than the standard RD interest rate. The account matures upon the completion of 5 years. If needed, there may also be an option to continue the account further, in accordance with the rules.

Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.