# recuring deposite of post office how it is can they give better returns?

for my daughter i have opened 1100 rs/month recuring in post office what will be the value after six years same i hve opened for my son same amount 1100 for the six years.

recuring deposite of post office how it is can they give better returns?

## 2 Replies to “recuring deposite of post office how it is can they give better returns?”

1. Ali 5000 says:

six years and monthly payment ,it mean is
6*12=72 months
1+72/2=36.5
1000/36.5=27.39%
27.39*12/36.5=9%
your interest rate is 9% yearly
if this rate is higher than inflation rate in your country ,then do it, if not try another chance

2. Milind Desai says:

Recurring Fixed deposits gives you much better returns than normal fixed deposits because the interest gets accumulated and you get to enjoy compound interest. For Your son and daughter, Assuming the rate of interest is standard at 8.5% and assuming there is no tax that will be deducted when the term gets complete, each will get Rs 85932. The formula is very simple.

P is the principal (the initial amount you borrow or deposit)

r is the annual rate of interest (percentage)

n is the number of years the amount is deposited or borrowed for.

A is the amount of money accumulated after n years, including interest.

When the interest is compounded once a year:

A = P(1 + r)n

However, if you borrow for 5 years the formula will look like:

A = P(1 + r)^n

This formula applies to both money invested and money borrowed..

What if interest is paid more frequently?
Here are a few examples of the formula:

Annually = P × (1 + r)*n = (annual compounding)

Quarterly = P ((1 + r/4)4)*n = (quarterly compounding)

Monthly = P ((1 + r/12)12)*n = (monthly compounding)
Of course you if you borrow the same formula except it will be raise to N.

I assume and hope this will be monthly compounding rather than annual compounding.