Hi all,
Last weekend at home I did some analysis on investment plan. In you plan well now itself, you can be a crorepati by the time you retire. Banks previously had such a plan which they discontinued due to floating interest rates. Since this is beneficial to everyone, I thought of sharing it with you. (For International readers if any: The post is in INR. Please plan according to your currency). If you feel you don’t want to save/ not interested in investment/ blah blah blah… feel free to move on. Others please read on:
Please refer attachment at the end of the post:
The plan is very simple; every month deposit a part of your salary in a recurring deposit account (RD). Let’s say every month you are ready to save Rs.1000. At the end of 7 years you will be Rs.1,21,567. Round it off to the bottom about and start a fixed deposit (FD) for Rs.120,000. You will be getting Rs.1000 per month (PM) from this FD. Now start another RD account (since the previous one has matured after 7 years). So from now on you will be depositing Rs.2000 in the new RD account. This way by the time you retire you will have a FD account of Rs.75,60,000 (75 lacs) and drawing a monthly interest of Rs.63,000.
Rs.1000 is a very low amount that we save. Easily we can save Rs.4000. But make sure you start two separate account of Rs.2000 so that in case of emergency you can close one of them. If you deposit Rs.4000 you will be having an FD account of Rs.3,02,40,000 (3 Crores) and a monthly interest of Rs.2,52,000!
I have done all the possible permutation and combination to arrive at the right amount. After 7 years our salary is going to be at least twice what we are earning now. But anyway I have taken the least amount (4000) and also rounded it off to the lower value for FD. Also, the bank interest rate is 10.50% pa, but I have taken it as 10% only. Feel free to tweak it and make use of the link provided below to calculate amount at maturity. My actual plan is something different which increments Rs.2000 after the 7th year and it comes to 5 Crores (You can tweak this plan easily, see the second sheet of attachment).
Misc Information:
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Bank interest rate may change in future. It may increase/decrease. To be on the safer side, start an account for a longer term with higher interest rate.
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ICICI bank interest rates are low (as usual). Its just 9.50% wheras other bank gives 10-11%
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If your parents are bank employees, you get higher interest rates if it’s a joint account
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The sooner you start, the better. If you keep postponing, the lesser benefits you will reap in the end.
You may think that what the use of having 3 crore by 60 years? Well, you will have rich children,
you don’t have to be dependant, buy a BMW
, or do anything you want. After all its your money.
Finally, thanks to my father coz if not for him, I could have never known of such ways for a safe future!(of course you would have already guessed that I could have never come with such a thing
). I will be putting up the same in my blog also. In case of any doubts regarding the attachment, feel free to comment
Tools:
Federal bank RD calculator here http://www.federalbank.co.in/Calculators/RecuringDepositPlanCalc.aspx
Attachment:
Note: Rename .doc to .xls to open
Rd-Fd Investment Plan