₹10,000 monthly RD for 5 years: Post Office or SBI—which gives the bigger maturity amount?

Recurring Deposits (RDs) are popular among conservative investors because they offer fixed returns that are not affected by market fluctuations. If you invest Rs 10,000 every month for five years, both Post Office RD and SBI RD can help build a sizable corpus, but the maturity amount will differ because of the interest rates offered.

For a monthly investment of Rs 10,000 over five years:
● Post Office RD interest rate: 6.7% p.a.
● SBI RD interest rate: 6.05% p.a.
● Total investment: Rs 6 lakh in both cases
The table above shows the estimated maturity value and interest earned under both schemes.

Based on current interest rates:
● Post Office RD maturity amount: Rs 7.14 lakh
● SBI RD maturity amount: Rs 7.02 lakh
This means an investor can earn approximately Rs 12, 244 more by choosing a Post Office RD over an SBI RD for the same investment and tenure.Actual returns may vary if interest rates change in the future.

A Recurring Deposit (RD) allows investors to deposit a fixed amount every month for a specified period. The returns are predetermined at the time of investment, making RDs a preferred savings option for investors seeking predictable growth.

A Post Office RD account can be opened with a minimum monthly deposit of Rs 100 and there is no upper investment limit.Premature closure is allowed only after three years after opening the account. If the account is closed before completing the full five-year tenure, the deposit earns only the Post Office savings account interest rate instead of the RD rate.

SBI also allows RD accounts to be opened with a minimum monthly deposit of Rs 100. If six consecutive instalments are missed, the RD account may be closed prematurely and the balance paid to the depositor.

For RD accounts with tenure up to five years, SBI charges a penalty of Rs 1.50 per Rs 100 deposit per month for delayed instalments. For RDs with tenure above five years, the penalty is Rs 2 per Rs 100 deposit per month. However, the total penalty cannot exceed the interest earned on the RD account.