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Post Office RD vs. SBI RD: Which Investment is More Beneficial?

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Post Office RD vs. SBI RD: Which Investment is More Beneficial? : Both Post Office Recurring Deposit (RD) and SBI RD are popular options that allow you to invest a small amount regularly. These plans are particularly suitable for investors seeking safe and fixed returns. Let’s explore which scheme might be better for you.

What is a Recurring Deposit (RD)?

A Recurring Deposit (RD) is a scheme where you need to deposit a fixed amount every month and earn interest on it. It works like a savings jar, where small amounts accumulate into a significant sum. You can open an RD in banks for a tenure of 1 to 10 years, while a Post Office RD must be opened for a minimum of 5 years.

Post Office RD: Interest Rate and Returns

  • Interest Rate: 6.2% (effective from April 1, 2024)
  • Investment Tenure: Minimum of 5 years
  • Minimum Investment Amount: Starting from ₹100

Example: If you deposit ₹2,000 monthly for 5 years, your total investment will be ₹1,20,000. At an interest rate of 6.2%, you will earn ₹20,866 in interest, resulting in a total return of ₹1,40,866.

SBI RD: Interest Rate and Returns

  • Interest Rate: 7% for 1 to 3 years; 6.5% for 5 to 10 years
  • Investment Tenure: 1 to 10 years
  • Senior Citizens: Additional 0.5% interest

Example: If you invest ₹2,000 monthly in SBI RD for 2 years, your total investment will be ₹48,000, earning ₹3,641 in interest at 7%, bringing your total to ₹51,641. For a 5-year investment at 6.5%, if you invest ₹1,20,000, you will receive ₹21,983 in interest, totaling ₹1,41,983.

Where Will You Get More Benefits?

  • Post Office RD: After 5 years, you will receive ₹1,40,866 at a 6.2% interest rate.
  • SBI RD: After 5 years, you will receive ₹1,41,983 at a 6.5% interest rate.

Conclusion

If you plan to invest for a longer duration, SBI RD offers slightly higher returns due to its 6.5% interest rate compared to the Post Office’s 6.2%. However, if you prefer a safe, long-term investment, the Post Office RD is a better option, especially if you like investing in guaranteed government schemes.

Ultimately, both options can be beneficial based on your investment preferences.

Priyanshi Rao

Blogging is not an easy task and keeping abreast of all the news of the country and the world on a daily basis is no less than an art. I publish information related to business and finance here for all of you. My name is Priyanshi. I hope you are liking the information given.

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