New Delhi: Building a large savings corpus does not always require high salaries or risky investments. A disciplined approach using the Post Office Recurring Deposit (RD) scheme shows how even small daily savings can grow into a fund of nearly Rs 20 lakh over time. Backed by the Government of India, the scheme remains a popular choice for risk-averse investors seeking steady and guaranteed returns.
What Is the Post Office RD Scheme?
The Post Office Recurring Deposit is a government-run savings plan where an individual deposits a fixed amount every month for a defined period. The scheme is known for its simplicity, affordability, and safety. An RD account can be opened with a minimum monthly deposit of Rs 100, making it accessible to people across income groups. Individuals aged 10 years and above can open an account, and parents can also invest on behalf of their children.
Interest Rate and Tenure
Currently, the Post Office RD offers an interest rate of around 6.7 percent per annum, compounded quarterly. The standard tenure is five years, but investors can extend or reinvest their maturity amount to continue growing their savings over a longer period. Interest rates are revised by the government every quarter.
How Rs 400 a Day Can Build Rs 20 Lakh
The key lies in consistency. Saving Rs 400 per day translates to a monthly investment of Rs 12,000 and an annual contribution of Rs 1.44 lakh.
If an investor maintains this discipline and reinvests maturity amounts over time:
The total savings build steadily in the initial years
Over a longer horizon of around 10 years, the accumulated corpus can reach approximately Rs 20 lakh or more, depending on interest rates
A sizeable portion of this amount comes from interest earnings, highlighting the power of compounding
This strategy shows how regular small investments can deliver meaningful long-term results.
Who Is This Scheme Best Suited For?
The Post Office RD is ideal for salaried employees, small traders, homemakers, retirees, and first-time investors. Since returns are guaranteed and not linked to market fluctuations, the scheme suits those who prefer stability over high-risk returns.
Safety and Additional Benefits
As a government-backed scheme, the Post Office RD offers full capital protection. Nomination facilities ensure that savings are passed on smoothly in case of unforeseen events. Account holders may also avail a loan against their RD balance after one year, subject to conditions.
Bottom Line
With disciplined saving, patience, and a secure investment vehicle, even modest daily contributions can turn into a substantial financial cushion. The Post Office RD proves that long-term wealth creation is possible without taking market risks—one small deposit at a time.
About the Author
