SBI vs Post Office: Where Should You Park ₹12,500 Monthly for 5 Years for Better RD Returns?

For many Indian savers, the dream of building a sizeable financial cushion doesn’t necessarily begin with large, one-time investments. Sometimes, the slow-and-steady route of monthly saving can yield surprisingly substantial outcomes. That’s where Recurring Deposits (RDs) step in as a powerful and safe tool to grow wealth with discipline.

Let’s say you have ₹12,500 to spare every month and you want to invest it consistently over the next five years. Two prominent options likely on your radar are the SBI Har Ghar Lakhpati RD and the Post Office National Savings RD. While both offer security, guaranteed returns, and steady growth, they differ in structure, returns, and flexibility.

So which one will help you build a bigger corpus after five years? Let’s break it down.

Understanding SBI’s ‘Har Ghar Lakhpati’ RD Scheme

State Bank of India’s Har Ghar Lakhpati RD is designed for goal-based saving. The idea is simple: contribute a fixed amount every month toward a specific target—like ₹1 lakh—and let your money grow through compounding. Depending on how much you invest and the tenure you choose, your final corpus will vary. The minimum deposit starts at just ₹100, making it accessible to almost everyone.

This RD plan is open to:

Individual account holders

Joint account holders

Minors aged 10 years and above (self-operated)

Guardians on behalf of minors

Currently, SBI offers 6.30% interest per annum for RD tenures ranging from 5 to 10 years. If your goal spans a shorter duration, say 3–4 years, the rate is slightly better at 6.55% p.a.. Interest is compounded quarterly, which adds to the final return.

A Look at the Post Office National Savings RD

The Post Office RD, backed by the Government of India, is another strong contender. With a fixed 5-year term, this scheme ensures assured and safe returns—especially appealing to risk-averse investors.

This plan is open to:

Single adult investors

Joint holders (up to three people)

Guardians investing for minors or mentally challenged individuals

Minors aged 10 years or above operating accounts in their own name

Deposits start from as low as ₹100, and there’s no upper limit officially stated. Contributions must be in multiples of ₹10.

Currently, the Post Office RD offers a slightly better interest rate than SBI’s 5-year RD, standing at 6.7% per annum, compounded quarterly.

Comparing the Numbers: ₹12,500 Monthly for 5 Years

Let’s now get to what matters most—returns.

Over a 5-year period, investing ₹12,500 every month in either scheme would total an investment of ₹7,50,000. Here’s how they compare at maturity:

SBI RD:

Estimated Returns: ₹1,32,726

Maturity Amount: ₹8,82,726

Post Office RD:

Estimated Returns: ₹1,43,074

Maturity Amount: ₹8,92,074

Clearly, the Post Office RD edges out SBI’s offering by approximately ₹9,348 over the same investment period, thanks to its higher interest rate.

Flexibility & Accessibility

Both schemes offer similar account-opening flexibility and cater to a wide demographic, including minors. However, the Post Office RD provides slightly more freedom in deposit amounts, allowing investments in smaller chunks without an official upper cap, while SBI’s Har Ghar Lakhpati RD tailors the monthly contribution to match specific savings targets.

Which One’s Better?

If you’re purely looking at returns, the Post Office RD comes out ahead, thanks to its higher 6.7% annual interest rate. It offers better compounding benefits over the 5-year span, helping you walk away with a slightly larger maturity corpus.

That said, if you prefer the convenience of digital banking and already have a strong relationship with SBI, the Har Ghar Lakhpati RD is still a solid, safe, and practical option—especially for goal-based saving.

At the end of the day, both plans reward discipline, not just deposits. Choose the one that best fits your financial goals, convenience, and comfort with the institution.