The future value of investment will be
A Recurring Deposit (RD) is a savings scheme that enables you to invest a fixed sum of money at regular intervals, to build considerable wealth over time. In this savings scheme, the return and maturity amount depends on the interest rate and tenure, apart from the investment amount. You may also get to save on taxes by investing in recurring deposits. The best part is that you can use the SBI RD calculator available on Angel One to calculate your returns before opening an RD account.
By entering a few variables in this online calculator, you can estimate the interest on your investment and the total maturity value after the tenure ends. This can help you plan your finances efficiently, save time, and take decisions in an informed manner. The online SBI RD calculator is available for free, and you can use it anytime and even on the go!
The Angel One calculator has a friendly interface and is easy to use. Just follow the steps mentioned below to compute your RD results accurately.
Step 1: Enter the amount you wish to invest per month
Step 2: Enter the interest rate
Step 3: In this last step, enter the tenure (in years)
And that's it! In just a few seconds, the online SBI RD calculator will display near-accurate results.
These three things are integral to the RD formula – interest rate, monthly investment, and number of quarters.
This is the SBI RD calculator formula that most other banks use as well:
M = R[(1+i)^n-1]/(1-(1+i)^(-1/3) )
M is the maturity value,
R is the monthly deposit amount,
i is the rate of interest/400
n is the number of quarters
To quickly use the SBI RD calculator online, you just need to enter 3 variables - Investment amount, interest rate and tenure. The estimated return and maturity value will be displayed instantly. Below is an example to give you a better idea.
Say, you are planning to invest Rs. 10,000 monthly in an RD for 5 years at 6% p.a. This is how you can use the SBI RD online calculator to assess the return and maturity amount:
- Enter Rs. 10,000 in the monthly investment field
- Select 6% as your interest rate
- Choose 5 years as your investment tenure
The recurring deposit calculator will display Rs. 6,00,000 as the total amount of investment, Rs. 1,00,636 as the estimated return, and Rs. 7,00,636 as the total maturity value.
- Eliminates manual error: Manually calculating your RD returns can be cumbersome and prone to errors. Using an online calculator eliminates human error and provides near-accurate estimates.
- No charge: Since the RD calculator is available for free, you can use it as many times as you want without worrying about charges.
- Makes financial planning simple: This calculator helps you find the right balance between monthly expenses and investments. You can decide how much to set aside for the RD account while handling everyday needs. You can also gauge the amount you need to save every month to fulfil long-term dreams like saving for retirement or buying a house.
- Simplifies decision-making: You can enter various combinations of investment, interest rate, and tenure to compare returns in multiple scenarios. This helps you zero in on the terms that align with your needs.
- Rate of interest: Return is high when the interest rate is high and vice versa. For instance, investing Rs. 10,000 for 1 year at an interest rate of 6% p.a. will give a maturity value or total return of Rs. 1,23,953. A higher rate, say 9%, will give a return of Rs. 1,25,967.
- Amount of monthly investment: The more you invest, the greater will be the return. For example, investing Rs. 5,000 every month at 8% p.a. for 1 year will give a total return of Rs. 62,646. However, if you invest Rs. 10,000, the return will go up to Rs. 1,25,293.
- Investment tenure: Alonger tenure implies greater return. For instance, investing Rs. 10,000 monthly at 8% interest p.a. for 1 year will give you a total return of Rs. 1,25,293. However, staying invested for longer, say 5 years, will yield Rs. 7,38,619.
- Withdrawing before time: Withdrawing your RD before the investment period ends can lead to less earnings. You might have to pay a penalty as well.
- Investor age: Financial institutions usually offer seniorcitizens and minors a higher interest rate, which means a better return.