SBI vs Post Office RD Interest Rate Calculation: The Recurring Deposit facility offered by banks and the Post Office provides depositors with an opportunity to build up savings through the regular monthly deposit of a fixed sum over a period. Since bank deposits up to Rs 5 lakh come with a deposit insurance guarantee, the RD account works as one of the safest ways to accumulate funds for specific financial goals.
In the State Bank of India (SBI), you can open an RD account for a minimum deposit period of 12 months and a maximum of 120 months. The minimum amount that you can deposit in SBI RD is Rs 100/month and thereafter in multiples of Rs 10. The interest rate on SBI RD is the same as SBI fixed deposit interest rates.
Also Read: How to use SBI FD Calculator
The Post Office offers a 5-year Recurring Deposit Account. The current interest rate on Post Office RD is 5.8%. You can deposit a minimum of Rs 100 and thereafter in multiples of Rs 10 in this post office scheme. Depositors can close the Post Office RD prematurely after 3 years from the date of account opening by submitting the prescribed application form at the concerned post office.
The Post office RD matures after 60 monthly deposits (or 5 years). The subscriber gets an option to extend the post office RD for further 5 years by giving an application. However, the interest rate applicable on the extended RD account would be the rate at which the account was originally opened.
SBI RD Calculation for 5-year deposit
For five-year deposits, SBI is currently offering 5.6% interest on deposits up to Rs 2 crore, as per the revised rates with effect from 13-08-2022.
The RD calculator shows if you start an RD of Rs 10,000 per month with SBI then the maturity amount after 5 years will be Rs 6,93,323.
The bank is offering 6.45% interest on 5-year term deposits to senior citizens. As per the calculator, the SBI RD of Rs 10,000 for senior citizens will return around Rs 7,08,040 after 5 years.
Also Read: Latest SBI, Post Office Fixed Deposit Rates
Post Office RD calculation
A monthly deposit of Rs 100 in post office RD will return Rs 6969.67 after 5 years. After extension, this amount will grow to Rs 8620.98 in 6 years, Rs 10,370 in 7 years and Rs 16264.76 in 10 years.
A monthly deposit of Rs 10,000 in post office recurring deposit will return more than Rs 6.9 lakh on maturity after 5 years.
Want better returns than RD?
Investors looking for better returns may invest in mutual funds through monthly SIP. However, investors should take advice from professional and certified financial advisors before investing in mutual funds as they come with market risks.