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If you want to make a big fund by investing small amount, then both the post office recording deposits (RD) and SBI’s ‘Har Ghar Lakhpati’ scheme can be both good options. But which of these will be better for you? For this, we compare both the schemes and see which scheme will be right for you.
First stop: Know the schemes
Post Office RD: In this, we can start investing at least 100 rupees every month, and it is for a period of 5 years. The interest rate is currently 6.7% annually, which is a compound on a quarterly basis. That is, interest is also available on interest.
Every house millionaire scheme: This SBI scheme is also RD based, but its goal is to collect small amounts and make funds of one lakh rupees or more in a long time. In this, you can start investing from a minimum of 610 rupees a month, and the duration can be chosen from 3 years to 10 years. The interest rate is 6.75% for ordinary citizens and up to 7.25% for senior citizens.
conclusion: At least Rs 100 in the post office and Rs 593 in SBI will have to invest every month. In such a situation, the post office is more flaxable for small investors.
Second stop: interest rate and return
Suppose you invest 2,000 rupees every month. So both of them see how much returns will be available in both schemes for 5 years.
Post Office RD:
- Interest Rate: 6.7% annually (quarterly compounding)
- Monthly Investment: Rs 2,000
- Duration: 5 years (60 months)
- Total Investment: 2,000 × 60 = 1,20,000 rupees
- Maturity Amount (approx): Rs 1,42,732 (based on RD calculator)
- Total interest: 1,42,732 – 1,20,000 = 22,732 rupees
SBI every household RD (for 5 years):
- Interest Rate: 6.55% annually (for general citizens)
- Monthly Investment: Rs 2,000
- Duration: 5 years (60 months)
- Total Investment: 2,000 × 60 = 1,20,000 rupees
- Maturity Amount (approx): Rs 1,42,168 (based on SBI RD calculator)
- Total interest: 1,41,983 – 1,20,000 = 22,168 rupees
conclusion: Post office RD is getting a little more interest, as the rate of 6.7% and quarterly compounding is advantage. SBI has a rate of 6.55%, so in 5 years we will get about 564 rupees less. But if we invest for 3 years or 4 years in SBI, the interest rate can be up to 6.75%, which is more than the post office.
Note: Interest rates can change from time to time. Apart from this, this calculation has been broadly done.
Third stop: period and flexibility
The duration of the post office RD is 5 years fixed. It can be extended after 5 years and for 5 years. But in SBI we have the freedom to choose a period between 1 year to 10 years. If we have to invest for a short time, SBI is better.
conclusion: If you want to invest for less than 5 years, then SBI ‘Har Ghar Lakhpati’ scheme will be better for you.
Fourth stop: Security
If the post office scheme is supported by the government, then 100% is safe. SBI is also a government bank, and the amount up to Rs 5 lakh in RD is safe under the Deposit Insurance Program. The risk in both is negligible.
conclusion: Both are equal in this, investment can be made anywhere.
Fifth stop: Who can invest
Any person can invest in both these schemes. This account can also be opened in the name of young children. You can operate it yourself when you are 10 years or older. You can open an RD account in any post office and ‘every home millionaire’ account in any branch of SBI.
conclusion: In this too, both are equal to investing anywhere.
Both schemes can meet your financial goals
Both schemes are good for small investors. Post Office RD is better for those who want for short investment and long periods. At the same time, SBI is suitable for every home millionaire scheme for those who want flexibility in the period and more interest in short periods. Depending on your needs and convenience, either scheme can meet your financial goals.
Disclaimer: This story is only for information. We advise investors to consult experts before taking any investment decision.
