How an RD of 5000 will earn 33 lac in 20 Yeras akshtha, 16 Jul 2013

I want to invest 5000 in Rd for 20 years . Iread in one paper that this will earn me 33 lacs after 20 years Can U explain. And is there any other safe option for investment. I am a housewife and my husbands salry is 25000

Fintotal Answer

Hi Akshatha. I would like to tell you that RD can be maintained maximum for a period of 10 years only. And just to assume, if you put in Rs 5000 per month for 20 years, you may get not more than Rs 25 lacs. The recurring deposit interest works on compounding formula. The safe investment options for such a long period are PPF, FDs, etc. But your long term investments should also be capable to beat inflation. So considering this, one must invest in growth assets such as equities, gold, equity related products, real estate, etc. Though the returns are not guaranteed, they give good returns if held for long term. Looking at your goal, you must invest in a large cap mutual fund thorugh monthly SIP. Write to us at http://assistance.fintotal.com/ for further assistance.

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