Post Office Scheme: Your Rs 10 can grow into a big amount of money; Check experts' tips

Post Office Scheme: Small Saving Schemes have a feature to help investors grow their money into a very large pile from just little amounts that they can afford to invest. There are several money-making small schemes, where an investor can invest a lump sum amount on an annual basis, half-yearly basis, quarterly basis or even monthly basis. But, now for ease of investors, there are provisions where an investor can invest on daily basis as well. Post Office RD or Post Office Recurring Deposit Scheme is one such scheme. It is a short-term saving scheme that gives good returns to people.

Speaking on the Post Office RD scheme; SEBI registered tax and investment expert Manikaran Singhal said, "Currently, post office RD rate of interest is 7.2 per cent. Post Office Account RD helps a small investor by allowing them to invest as little as Rs 10 per month and any amount in multiples of Rs 5. There is no upper limit for the investment. Joint accounts can also be opened by two adult individuals. Account can also be opened in the name of minors. Multiple accounts can also be opened."

See Zee Business Live TV streaming below:

Elaborating upon the return, in terms of money, one can expect in Post Office RD scheme Singhal said that Post office RD is basically a monthly investment for a fixed period of 5 years with a interest rate as mentioned above of 7.2 per cent per annum (compounded quarterly). On completion of the fixed tenure of five years, RD account with Rs 1000 invested every month will fetch you Rs 72,505.

There is no TDS on interest from post office RD. However, income is taxable in the hands of investor as per their individual tax slab. It’s one of the best investment choices for every investor who is looking for risk-free investment avenue to save some amount every month systematically. The post Office RD account offers flexibility by allowing a partial withdrawal up to 50 per cent of the balance after a year. However, Singhal advised investors to avoid partial withdrawal as it leads to loss of the compounding benefits that the investor will get after the year.

"Post Office RD account can be opened by more than one by single investors. One can open a Post Office RD account in the name of one's minor child as well. However, there is a default charges in case an investor misses one's monthly deposit in Post Office RD account. The default fee is 5 paise for every 5 rupee in case if you miss on any monthly investment, said Jitendra Solanki, SEBI registered tax and investment expert.