Better option – deposit in MIS or bank | Deposit clearance can be done at any time in the bank

October 14th, 2010| Finance.

Better option – deposit in MIS or bank | Deposit clearance can be done at any time in the bank

Deposit

If one lakh amount is deposited in the MIS (monthly income scheme) of post office and if the interest on this amount is deposited in RD (recurring deposit), then we can get Rs.1,65,702 in six months which means that we are getting a profit of Rs.10,950. The interest is 10.95% per year which is simple interest and not compound interest. If the compound interest is calculated for three months for MIS plus RD, we can get 8.5% interest. So the interest given by MIS and RD is more than the interest given by the bank. We can take the money by clearing the deposit whenever we want but there is no clearance option in MIS up to one year. The bank will also give a loan on the deposit for limited period easily, but we need to pay the loan with 2% more interest. If the MIS is not renewed after the duration, they will pay 3.5% interest on the deposit but the deposit is renewed automatically after the period of duration in many banks.

A person cannot deposit more than Rs.4,50,000 but there is no maximum limit in the bank deposit. If the deposit is cleared after one year in MIS, they will pay the remaining amount after reducing 2% of the interest. They will pay the amount after 1% reduction if the deposit is cleared after 3 years. In the case of banks, if the deposit is cleared after the period of duration is completed, they will pay the interest amount by reducing 1% or 2% of the interest amount which is applicable until the period of duration. If the interest rates are increased after 15 days of depositing the amount, then they can clear the deposit and pay in the new deposit. This facility is not available in the MIS in the post office. So we should deposit the amount in the MIS or bank deposit based on the long term and short term uses and plans.

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