RECURRING DEPOSIT CALCULATOR
Recurring Deposit is a simple term deposit investment tool where you make fixed monthly investments towards it. It is a good option for investors who don’t want to make a lump sum investment in FD, but at the same time wants to grow a regular investment habit. Since it is one of the traditional investment tools, most banks and financial institutions offer Recurring Deposit to their customers.
Although the concept of RD is very straight forward, it involves complex calculation. Earlier, when the process was manual, calculating RD return was cumbersome and had a higher chance of error. But with a modern-day online RD calculator, anyone can easily calculate how much an RD investment will fetch within few seconds.
Angel One RD calculator is simple and user friendly, gives you accurate result in few seconds.
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A few things to know about Recurring Deposit before you invest
- It is a traditional investment tool, gives you conservative return in a cumulative manner
- Most banks offer interest between 3.5 and 8.5 percent on recurring deposits
- Most banks will charge a 2 percent penalty for early withdrawal
- RD investment is subjected to taxation. Valid from June 1st, 2015, 10 percent TDS is levied if the investment amount is more than Rs. 40,000. But the tax only applies to the interest amount and not on the maturity value
- You can choose RD tenure between 6 months to 10 year
FAQs - Frequently Asked Questions
What are the advantages and disadvantages of RD?
A recurring deposit has certain advantages and disadvantages when compared to other investment options.
Recurring Deposit or stocks, where should I invest?
|Areas of concern||Recurring Deposit||Stocks/Equity Investment|
|Type||Monthly fixed investment for over a period||No investment commitment. You can invest as little or as much as you want|
|Tenure||Fixed tenure - 12 months or 36 months or more||No fixed tenure. You can invest for few hours or few days|
|Risk||Conservative investment with no risk. Confirmed return at the end of the tenure||Subject to market risks|
|Return||Compounded interest earning. Low to moderate return||Best performing asset class. Historically proven to offer a better return than any other investment|
|Liquidity||Fixed tenure. Early withdrawal may attract penalty||Highly liquid|
|Tax||Interest over Rs 10,000 is subject to TDS||Tax-free return|
|Inflation sensitivity||Low||Can beat inflation|
What does an RD calculator do?
In recurring deposit, interest is compounded quarterly using a complex formula. RD calculator takes the hassle out from the process, makes it easy for anybody to calculate the return. It helps investors to make an informed investment decision and align their financial goals.
What is the formula to calculate RD interest?
The RD calculator
M = R [(1+i) n – 1]/ 1- (1+i) -1/3
M = Maturity Amount
R = Recurring Deposit Monthly Instalment
i= Rate of Interest
Example: Let’s say an investor starts an RD with Rs 500 for 5 years. Payable interested on the deposit is 12 percent. Final maturity amount will be calculated as,
M= 500[(1+12)5-1]/1-(1+12) – 1/3
M= 41, 243
Calculating RD return manually using this formula is difficult and time-consuming. But with RD calculator, you can get the result in seconds.
How does Angel One RD calculator work?
Want to compare different RD investments to find the best one? You can do it easily with RD deposit calculator which calculates results within few seconds.
What are the advantages of using RD deposit calculator?
Easy to use: It can be used by any age group with any level of technical expertise. Keeping in mind that our customer base is diverse, the calculator is designed to accept simple inputs to calculate the outcome. All you have to do is enter the deposit value, tenure, and interest amount; the calculator will compute the maturity amount accurately.
Convenience: The purpose of using an online RD calculator is to save time, and it does the same. It accurately calculates complex formulas within seconds and saves time if you want to compare between different recurring deposit options.
Error-free: The online RD calculator gives error-free results in seconds. It runs on a smart algorithm and returns accurate results if all inputs are given correctly.
Helps financial planning: It enables you to plan your future by calculating possible outcomes with precision. It helps you learn how much you need to invest to achieve your financial goals in advance.
Free of cost: We don’t charge you to use the calculator. You can use it multiple times to compare between different RD outcomes until you find the best solution.
How is recurring deposit interest calculated?
In recurring deposit, the interest is compounded quarterly. It varies between the banks. But it is also influenced by a few external factors.
RBI policy: RBI decides the repo rate. Repo rate is the interest that banks are required to pay to RBI to borrow fund. If RBI lowers repo rate, it reduces the cost of borrowing for the banks which they pass on to their customers as higher returns.
Recession: Recession slows down economic performance in all sectors, including banks. In case of recession, banks often lower return on RD due to low credit demand.
Inflation: RD interest rate matches the inflation rate in the economy. Higher the inflation rate, higher is the return on RD.
Age of investor: To offer a benefit to senior citizens, banks offer a higher interest rate to them. It will also affect the maturity amount of your RD.
Tenure: RD maturity calculator takes tenure as a variable input to calculate final maturity value since the duration of investment directly impacts the amount of interest earned.
Taxes: RD interest income is subject to TDS deduction. The amount of TDS depends on the annual income of the investor. Banks impose 10 percent TDS on RD interest income if it exceeds Rs 10,000. But only the interest is subject to tax, not the principal amount.