Use the RD calculator below to know about the compound interest earned on your principal investment for your desired tenure.
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A recurring deposit calculator is an online tool that you can use to plan your RD investments. In a recurring deposit, you invest a fixed sum each month, for a specified investment tenure. Over the course of the investment period, the amounts you deposit continue to earn interest at a predetermined fixed rate. At the end of the investment tenure, the maturity amount you receive includes the principal deposited periodically as well as the interest earned thereon.
An RD calculator shows you the profit you will earn on your recurring deposit, as well as the total amount you will receive at maturity. To get these details, all you need to do is enter the following parameters in the online tool-
• Your monthly investment amount
• The expected rate of return
• The investment period
Once you enter the details listed above, the RD calculator will give you insights into how your investment will grow. These details will help you plan your RD in a more informed manner.
A recurring deposit, as the name indicates, is an investment you make repeatedly over a specified tenure. So, the returns on the amounts deposited accrue on a continuous basis. Calculating these returns manually can be challenging and prone to errors. Here’s where a recurring deposit calculator can help.
This nifty online tool takes into account different parameters like the amount of monthly investment you plan to make, the rate of interest thereon and the tenure of the RD. Using these details, the calculator gives you insights into the profit you will earn on your total investments and the total maturity value of your RD. This makes investment planning much easier.
An RD calculator can also help you in many other ways, some of which are listed below.
• It gives you accurate results about the maturity amount of your recurring deposit.
• It facilitates more informed financial planning for your future goals.
• It allows you to compare recurring deposit facilities offered by different banks.
The best way to calculate the maturity amount for your recurring deposit is by using an RD calculator. This online tool makes use of the following formula to arrive at the maturity amount.
Maturity amount = P (1 + r/n)nt
Here, the variables denoted by the letters are as follows:
• P is the principal amount deposited each month
• R is the rate of interest
• n is the frequency or the number times the interest is compounded annually
• t is the overall tenure of the recurring deposit
This formula needs to be applied individually to each installment deposited in the RD, since the tenure of each installment differs. For instance, in the case of a 1-year recurring deposit, the first installment will be deposited for a period of 12 months, the second installment for a period of 11 months, the third for a period of 10 months, and so on.
As you may have guessed, this can get quite tedious and challenging to compute manually, especially for RDs with a longer tenure. So, it is best to use a recurring deposit calculator to compute the RD maturity amount in an instant.
sing a recurring deposit calculator has several advantages. If you are planning to invest in a recurring deposit, an RD calculator can benefit you in the following ways.• It helps save time
Manually calculating the maturity amount and the returns from a recurring deposit can take you a while.But an RD calculator saves you a lot of time.You can get the results from your inputs in an instant, making it extremely easy to plan your RD investments accurately.• It gives you accurate results
Manual calculations are also prone to human error.Computational mistakes can lead to misguided investment decisions.Here’s where an RD calculator proves to be beneficial.The online calculator gives you accurate results based on the inputs you provide.• It is free of cost and offers unlimited usage
Above all, a recurring deposit calculator is also free to use.You need not pay anything to make use of this online tool, and you can use it as many times as you need to.This makes it easy to change the inputs and compare RD offerings from different banks.
The minimum amount needed to start a recurring deposit varies from one bank or financial institution to another.Broadly speaking, however, you can start a bank RD with an amount as low as Rs. 500.
The minimum and the maximum investment tenure for a recurring deposit depends on the bank or the financial institution that you choose to open an RD with.Typically, the tenure ranges from 6 months to 10 years.
There is no minimum amount to start an RD.You can start with as low as Rs 500 per month for a designated period of time convenient to you.
Effective from June 1, 2015; TDS has been made mandatory for all recurring deposits.The TDS would be applicable only on the interest acquired on the deposit.
Yes, RDs can be withdrawn prematurely.Interest shall be paid until the day of closing.However, depending on your financial institution, there wil be certain penalty or exit fee applicable.