About Recurring Deposit (RD) Calculator

A Recurring Deposit (RD) is a popular investment option offered by banks and financial institutions in India. It allows individuals to deposit a fixed amount every month for a specific period and earn interest on their investments. Our RD calculator helps you calculate the maturity amount and interest earned on your recurring deposits.

How Does the RD Calculator Work?

The RD calculator uses the following formula to calculate the maturity amount:

M = R [(1+i)^n - 1] / (1 - (1+i)^(-1/3))

Where:

• M = Maturity amount
• R = Monthly deposit amount
• i = Rate of interest per quarter (annual rate/4)
• n = Number of quarters

Benefits of Recurring Deposits

• Regular Savings Habit: RDs encourage disciplined savings with fixed monthly deposits.
• Low Risk Investment: RDs are one of the safest investment options with guaranteed returns.
• Flexible Tenure: You can choose a tenure ranging from 6 months to 10 years based on your financial goals.
• Higher Interest Rates for Senior Citizens: Most banks offer additional interest rates (0.25% to 0.50%) for senior citizens.
• Loan Facility: Many banks allow you to take loans against your RD account up to 80-90% of the deposit amount.

RD vs FD: What's the Difference?

While both Fixed Deposits (FDs) and Recurring Deposits (RDs) are popular investment options, they differ in the following ways:

• Investment Pattern: In FDs, you invest a lump sum amount, while in RDs, you deposit a fixed amount monthly.
• Liquidity: RDs are generally considered more flexible as they require smaller regular investments compared to the lump sum investment in FDs.
• Interest Calculation: Interest calculation for RDs is more complex than FDs as it accounts for the monthly deposits and their respective interest compounding.

How to Use Our RD Calculator

1. Enter your monthly deposit amount in rupees.
2. Input the interest rate offered by your bank (in percentage).
3. Select the tenure period (in months or years).
4. Choose the compounding frequency (quarterly, monthly, half-yearly, or yearly).
5. Click "Calculate" to get the maturity amount, total investment, and interest earned.

Factors Affecting RD Returns

• Interest Rate: Higher interest rates yield better returns on your investments.
• Tenure: Longer tenures generally result in higher total interest earned.
• Compounding Frequency: More frequent compounding leads to slightly higher returns.
• Monthly Deposit Amount: Larger deposits naturally lead to higher maturity amounts.

Use our RD calculator to plan your investments better and achieve your financial goals efficiently. Remember, the earlier you start saving, the more you benefit from the power of compounding.