A Recurring Deposit (RD) calculator is an online tool that helps you calculate the maturity amount and interest earned on your RD investments. By entering details like monthly deposit amount, tenure, and interest rate, it provides an estimate of your future returns.
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An RD deposit calculator simplifies the process of determining the returns on your investment. By eliminating the need for manual computations, the calculator enables you to accurately determine the precise amount your deposits will accumulate over the specified period.
While the calculator handles most calculations, one factor that requires manual consideration is the TDS deduction. Under the latest RBI regulations, RDs are subject to TDS deduction. However, the implementation of these deductions may vary across financial institutions, and this inconsistency is why RD calculators typically do not incorporate them.
Despite this minor caveat, an RD amount calculator offers several advantages:
By providing an accurate projection of your investment's maturity value, the calculator empowers you to plan your future finances with greater clarity.
Instead of spending valuable time on complex calculations, the calculator offers a quick and convenient way to determine your RD returns.
The precision of these calculators ensures that you receive reliable estimates, which are crucial for effective financial planning.
Bajaj Finance launches a new variant, "FD Max", for investments upto Rs. 25,000 . Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a.for senior citizens and 8.60% p.a. for non-senior citizens , in this variant.
The calculation of the RD maturity amount involves three key variables, which are processed by an RD account calculator using a standard recurring deposit formula to determine the precise maturity amount.
The formula for RD maturity is
A = P*(1+R/N)^(Nt)
Where:
Variable |
Meaning |
A |
Maturity amount |
P |
Monthly RD instalment |
N |
Compounding frequency (number of quarters) |
R |
RD Interest rate (as a percentage) |
T |
Tenure |
This formula serves as the universal method for calculating RD maturity amounts, irrespective of the invested amount or the investment duration. All that's required is to input the specific values.
For example, let us calculate the maturity amount of an RD considering the monthly deposit amount of Rs. 7,000 and an interest rate of 8.50%.
Using the above mentioned formula, here A will be the “Maturity Amount”, P will be “Monthly RD Instalment” (Rs. 7,000), N will be “Compounding Frequency” (number of quarters), R will be “RD Interest Rate” (8.50% or 0.085) and T will be “Tenure” (1 year, equivalent to 4 quarters).
Hence
A = P*(1+R/N)^(Nt)
= 7000*(1+0.085/4)^(4*12/12)
= Rs. 7,671.40
A = P*(1+R/N)^(Nt)
= 7000*(1+0.085/4)^(4*11/12)
= Rs. 7,521.88
A = = P*(1+R/N)^(Nt)
= 7000*(1+0.085/4)^(4*1/12)
= Rs. 7,049.37
For this specific investment scenario, summing up this series, the total maturity value, i.e., A, equals Rs 85,947.42.
Manually solving such equations can be quite challenging. A Recurring Deposit Calculator swiftly provides you with the exact figure in seconds.
Utilising RD interest calculator is a simple and user-friendly procedure. To help you get started, here's a step-by-step guide:
Step 1: Input your "Monthly Investment Amount (in rupees)."
Step 2: Specify the "Time Period” (in months).
Step 3: Provide the "Rate of Interest (in %)" offered by your RD provider.
Within moments, you'll receive instant results, displaying the total investment value and the accrued interest amount.
An RD interest calculator offers several advantages:
Invest with confidence and foresight using RD interest calculator.
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Recurring Deposit (RD) is a type of term deposit offered by banks, post office and financial institutions in India. It allows you to save a fixed amount of money every month for a predetermined period and earn interest on it.
The interest on RD is calculated based on the principal amount, the rate of interest, and the tenure of the deposit. The interest is compounded quarterly, and the formula used to calculate the maturity amount is A = P*(1+R/N)^(Nt)
Where:
A = Maturity Amount
P = Monthly RD Instalment
N = Compounding Frequency (number of quarters)
R = RD Interest Rate as a percentage
T = Tenure
The choice between RD (Recurring Deposit) and FD (Fixed Deposit) depends on your financial goals and investment horizon. If you have a lumpsum amount to invest, FD is a better option as it offers higher interest rates. If you want to save a fixed amount every month, RD is a better option as it instils financial discipline and offers a higher interest rate than savings accounts.
The maturity amount in RD depends on the principal amount, the rate of interest, and the tenure of the deposit. You can use our online RD calculator to determine the maturity amount of your investment.
Starting from June 1, 2015, the Finance Bill has enforced mandatory TDS (Tax Deducted at Source) on all recurring deposits. It's important to emphasize that this requirement solely pertains to the interest earned on the RD.
The minimum amount to start an RD account varies from bank to bank. It can range from Rs. 100 to Rs. 10,000.
Yes, you have the option to prematurely terminate your RD account. In such cases, interest will be disbursed up to the closure date, and it's essential to note that your financial institution may levy a penalty fee.
Normally, the RD duration initiates at 6 months and can extend up to 10 years. You have the flexibility to opt for a tenure in increments of 3 months following the initial 6 months, allowing for options such as 9 months, 12 months, 15 months, and so forth.
No, the interest earned on a 5-year RD is not tax-free.
Missing an RD instalment may attract penalty charges and could disrupt your interest calculation.
