Post Office MIS RD Scheme: Try This Combo Investment Strategy for Better Results

Investing wisely is crucial to building wealth over time. In today’s article, we’ll dive deep into the benefits of combining the Monthly Income Scheme (MIS) and Recurring Deposit (RD) from the post office. Are you curious about how these two schemes can maximize your returns?

In this piece, we’ll uncover how the MIS offers an attractive interest rate of 7.4%, while RD provides a decent 6.7%. But what happens when you combine these two investment strategies? You’ll be surprised at the potential benefits that await you!|

Key Points to Note

• The Monthly Income Scheme (MIS) locks your investment for 5 years, offering a fixed interest of 7.4%.
• The Recurring Deposit (RD) requires monthly contributions, offering 6.7% over the same period.
• Combining both schemes allows you to redirect the monthly income from MIS into RD, enhancing your overall returns.
• The National Savings Certificate (NSC) may provide better returns if you are looking for alternatives with higher interest rates.

What is MIS?

The Monthly Income Scheme (MIS) is a government-backed investment option where you deposit a lump sum amount and receive a fixed monthly income. The scheme is designed for investors who seek regular income while ensuring the safety of their capital.

Key Features of MIS

• Duration: Your investment is locked for 5 years.
• Maximum Investment: You can invest up to ₹1,00,000 in a single account, and joint accounts allow for combined investments.
• Returns: At an interest rate of 7.4%, investing ₹1,00,000 means you will receive around ₹6617 monthly for the duration of the scheme.### Safety and Tax Benefits

Since this scheme is backed by the government, your capital remains safe. Moreover, there’s no TDS deduction on the interest earned, making it a tax-friendly option.

Exploring the Recurring Deposit (RD)

What is RD?

The Recurring Deposit (RD) is a savings scheme that encourages regular savings. You need to deposit a fixed amount every month for a specified tenure, which is usually 5 years.

Key Features of RD

• Monthly Contributions: You must deposit a fixed amount (minimum ₹100) every month.
• Interest Rate: The current interest rate stands at 6.7%, compounded quarterly.
• Total Returns: After 5 years, you receive both your principal and the accumulated interest.### Benefit of Regular Savings

The RD helps instill a disciplined savings habit. Although the returns are slightly lower than MIS, the compounding effect can lead to substantial gains over time.

How to Combine Both MIS and RD for Maximizing Returns?

Investing in both MIS and RD can be beneficial. Here’s how:

1. Start with an investment of ₹1,00,000 in the MIS.
2. Use the monthly income generated from MIS (around ₹6617) to contribute towards your RD.
3. Over 5 years, this approach can boost your total returns significantly.### Live Interest Calculation
   Let’s break down the calculations:

• Total Income from MIS: ₹6617/month for 60 months = ₹3,96,000.
• If you redirect this amount into an RD, your total contributions can be much higher, leading to increased returns.

Expected Returns

When combining both schemes, your overall returns can exceed ₹4,50,000 after 5 years, resulting in a substantial advantage over investing in either scheme separately.

Conclusion

While combining MIS and RD can enhance your returns, it’s essential to consider your financial goals. If your primary motive is to secure higher returns, exploring the National Savings Certificate (NSC) could be a wise choice, as it offers an interest rate of 7.7% for a similar tenure.

In summary, investing in both MIS and RD is an effective strategy for maximizing wealth, but always weigh your options. Consider your risk tolerance, investment goals, and the returns you expect. The world of investment is vast, and with the right knowledge, you can make informed decisions to secure your financial future!