For risk-averse investors seeking long-term savings options, Post Office Small Saving Schemes stand out as an excellent choice.
These government-backed schemes provide a secure avenue for investments with guaranteed returns.
Recently, the government has announced an increase in interest rates for Post Office Recurring Deposit (RD) for the October-December 2023 quarter.
Enhanced Returns on Post Office RD
The Finance Ministry has officially raised the interest rates on Post Office Recurring Deposits by 20 basis points.
Starting from October 1, 2023, and continuing until December 31, 2023,
the 5-year Post Office RD will now offer an annual interest rate of 6.7%, up from the previous rate of 6.5%.
Calculate Your Earnings
If you invest Rs 5,000 in an RD every month, your total investment in one year amounts to Rs 60,000 and Rs 3,00,000 over five years.
With the new interest rate of 6.7%,
you can expect to earn Rs 56,830 as interest over the course of five years, resulting in a total maturity amount of Rs 3,56,830.
On the other hand, if you invest Rs 3,000 in RD every month, your total investment in five years totals Rs 1,80,000.
According to the Post Office RD calculator, you’ll receive Rs 34,097 as interest, leading to a total maturity amount of Rs 2,14,097.
TDS Applicable on RD Interest
It’s important to note that TDS (Tax Deducted at Source) is applicable on the interest earned from RD.
A 10% TDS rate applies to RD interest, and TDS will be deducted if the monthly interest exceeds Rs 10,000.
The Central Government’s Finance Ministry reviews interest rates on small savings schemes every three months.
For the October to December quarter, only the interest rates on 5-year recurring deposits have been adjusted,
while the rates on other schemes remain unchanged at the previous rates.