Recurring Deposit Calculator
A Recurring Deposit (RD) is a financial instrument enabling regular deposits and earning returns on the investment. An RD deposit calculator provides investors with a precise calculation of the accrued amount at the end of the specified term.
- ₹ 100
- ₹ 10Lakhs
- 6M
- 120M
- 3%
- 9%
- Est. Returns
- Invested Amount
- Invested Amount
- ₹4,80,000
- Est. Returns
- ₹3,27,633
- Total Value
- % 8.00
Comprehensive Guide to Recurring Deposit (RD) Calculator
A Recurring Deposit (RD) is a type of savings scheme offered by banks and financial institutions where investors can deposit a fixed amount regularly (usually monthly) for a predetermined period at a fixed interest rate. RDs are popular among individuals looking for safe and steady savings with assured returns. A Recurring Deposit Calculator is a tool that helps investors estimate the maturity value of their RD investments based on the monthly deposit amount, tenure, and interest rate. This guide covers the components, usage, benefits, and practical examples of a Recurring Deposit Calculator.
Components of a Recurring Deposit Calculator
- Monthly Deposit Amount: The fixed amount deposited every month into the RD account.
- Tenure: The duration for which the RD is held, typically expressed in months or years.
- Interest Rate: The annual interest rate offered by the bank on the RD investment.
- Maturity Value: The total amount including both principal and interest that the RD will grow to at the end of the tenure.
How to Use a Recurring Deposit Calculator
- Input Monthly Deposit Amount: Enter the fixed amount you plan to deposit into the RD account every month.
- Enter Tenure: Input the duration for which you intend to hold the RD, either in months or years.
- Enter Interest Rate: Input the annual interest rate offered by the bank on the RD investment.
- Calculate: The calculator will compute the maturity value of the RD investment based on the inputs.
Formula for Calculating RD calculators
The formula is M=R[(1+i) (n-1)]/1-(1+I)(-1/3)).
Where,
- M is the amount you receive when your RD matures
- R is the RD instalment amount you pay each month
- N is the number of quarters in the tenure of the RD
- I is the rate of interest that the bank offers you divided by 400
- T is the time from the month you started the RD to its maturity
T is the time from the month you started the RD to its maturity
For better understanding, have a look at the example below:
ABC has opened a Recurring Deposit account for 2 years (8 quarters) at XYZ Bank, where he pays INR 10,000 as his monthly instalment. The bank has promised to pay him an interest rate of 6%. How will the Formula be applied in this case?
M= 10,000[(1+6/400) (8-1)]/1-(1+6/400)(-1/3))
So, the investment amount is INR 2,40,000, the total interest is INR 15,511 and the maturity amount is INR 2,55,511 approximately.
Conclusion
A Recurring Deposit Calculator is an essential tool for individuals planning to invest in RDs to save money systematically and earn steady returns. By understanding the components and using the calculator effectively, investors can make informed decisions about their savings and achieve their financial goals efficiently.