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Recurring Deposit (RD) Interest Calculator

RD Interest Calculator

Recurring Deposit is one of the most popularly procured investment schemes in India, by its citizens. This is especially popular among those from the salaried classes as this scheme is easy to procure, affordable and does not require a large amount of deposit. This investment option is provided by almost all banks in India such as Punjab National Bank, State Bank of India, ICICI Bank, IDBI Bank, HDFC Bank, Corporation Bank, Bank of Baroda and so on.

Under this scheme, customers will have to invest a set amount(subject to a minimum requirement) every month and the can avail a fixed rate of interest from the bank (rates are predetermined), until the period of maturity. At the end of this scheme, customers will receive the maturity amount, which is a sum of their deposit along with the payable interest.

This scheme is highly advantageous for those who do not have a large amount of money to invest but still wish to invest a certain amount and earn guaranteed returns. This is also a safe investment as there is no chance of the customer losing the money that they have invested.

Unique Features of a Recurring deposit Scheme, Are As Follows:

  • Customers will have to deposit a fixed amount each month.
  • Tenure or time periods of a Recurring Deposit Scheme is in multiples of 3 months.
  • Interest rate is determined annually.
  • Compounding is done after every quarter and not every month as many believe.

What is RD Calculator?

A Recurring Deposit Calculator as the name suggests, is used to find out the maturity value of the recurring deposit. There is a simple formula that is provided with which interest on a Recurring Deposit investment can be calculated. However, there are a few aspects that customers must keep in mind prior to calculating the interest.

Customers must look at each month’s installment as a separate deposit. Compounding only happens at the end of every financial quarter and not every month. Each monthly deposit will earn a different amount of interest. The amount procured at maturity is the total of enhanced value of each month’s deposit.

Formula for Calculating Interest on Recurring Deposit

As mentioned previously, compound interest on a Recurring Deposit amount is only added after the first quarter. Financial Quarters in a year are determined as follows -

  • Quarter 1 is from April to June
  • Quarter 2 is from July to September
  • Quarter 3 is from October to December
  • Quarter 4 is from January to March

Compounding occurs only after every quarter, hence until then a simple interest calculation will be applicable. For example, in case an individual avails a Recurring Deposit scheme in the month of February, the amount will only provide a simple interest until the month of March, after which interest will be compounded.

The formula used for Simple Interest is -

I=Prt

I stands for Interest

P stands for Principal

R is annual interest rate applicable(in decimal)

T is the tenure or time period of the scheme

The formula used for calculating Recurring Deposit Interest, provided by the Indian Bank Association, is as follows-

M =R [ (1+i)n – 1]

——————–

1- (1+i) -?

M stands for Maturity value

R stands for Monthly Installment

i stands for rate of interest divided by 400

n stands for number of quarters

By using the above formulas, in case a depositor invests Rs.1,000 in the month of January, using the simple and compound interest formulas provided, he/she will have Rs.12,801.90 as maturity amount at the end of the year at 12% rate of interest.

In another example, Sheela has procured a Recurring Deposit Scheme for a period of 30 months wherein she invests Rs.10,000 per month. The applicable rate of interest is 5% per annum.

The amount she receives upon maturity will be Rs.3,20,095 and the amount of interest that has been included in the maturity value is Rs.20,095.

How Can One Calculate RD Interest Online?

Customers can easily calculate the interest applicable and maturity amount that can be procured from a Recurring Deposit scheme by using the formulas mentioned above.

However, customers can also calculate the same online by visiting the website of the bank that they have procured their Recurring Deposit scheme from or most other banks, such as ICICI Bank, SBI Bank and so on. These banks generally have an online calculator which can be used to calculate interest.

How to Calculate Compound Interest on Recurring Deposit?

When it comes to Recurring Deposits, interest amount is compounded every quarter. This is then added up and the final amount that customers receive can be determined. The formula used to calculate compound interest is as follows-

A = P (1 + r/n) ^ nt

Where

A represents final amount procured

P represents principal or the amount that has been invested initially

r represents annual interest rate, counted in decimal

n represents the number of times that interest has been compounded per year

t represents tenure of the scheme

By using the above formula, the compound interest can be calculated.

For example,

Ajay has made an initial investment of Rs.1 lakh for a period of 5 years. The interest rate applicable is 8%. By using the above formula, the final amount that he will get is Rs.1.5 lakh.

Difference between Simple Interest and Compound Interest

The cost of borrowing money is known as interest, wherein the borrower pays a certain amount of fee to the lender. This is generally expressed in the form of a percentage and is either compounded or simple. Simple interest is calculated only on the basis of the principal amount of the loan whereas compound interest takes into consideration both the principal amount and the interest that is accumulated.

Simple interest is determined by multiplying the interest rate, number of periods in that loan with the principal amount.

The formula for this is -

I=Prt

I stands for Interest

P stands for Principal

R is annual interest rate applicable(in decimal)

T is the tenure or time period of the scheme

Compound interest is determined by multiplying principal amount into 1, added to the yearly rate of interest raised to the number of years minus 1. Unlike simple interest, compound interest is accrued on the principal amount and also the accumulated interest of previous periods.

The formula used to calculate Compound Interest is -

A = P (1 + r/n) ^ nt

Where

A represents final amount procured

P represents principal or the amount that has been invested initially

r represents annual interest rate, counted in decimal

n represents the number of times that interest has been compounded per year

t represents tenure of the scheme

TDS on Interest from Recurring Deposit

Until the May of 2015, banks did not deduct tax on the Recurring Deposit interest. However, from the 1st of June, 2015, TDS or tax Deduction at Source was applicable on the interest accrued on a Recurring Deposit account.

If the individual wishes to avoid having the tax deducted at source then they will have to submit Form 15H/15G or Exemption Certificate under Section 197 or any other applicable Tax Exemption Certificate with the bank. This tax exemption certificate or form will have to be provided every financial year for each Recurring Deposit held with the bank.

Recurring Deposit - Sitemap

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Recurring Deposit by Banks
Recurring Deposit by other Institutions

RD Interest Calculator Reviews

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  • YES Bank Recurring Deposit
    "Excellent service"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    I have opened Recurring deposit through YES Bank for a while, Response is also good one with the Yes bank. I don't have any issues with them till now, the tenure period is up to one years, there is no issue till now i have face in this bank, overall service is good.
    Was this review helpful? 0
    , ahmedabad
    Reviewed on Dec 11, 2018
  • Punjab National Bank Recurring Deposit
    "Good online option for RD with PNB"
    PUNJAB NATIONAL BANK
    0.5 3.0/5 "Satisfactory"
    The online facility is there for RD, they are providing moderate interest for recurring deposit. I can deposit minimum of Rs. 1000, they are providing the interest around 7.1% for per annum. I could deactivate the RD through online but it was not successful.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Dec 04, 2018
  • Kotak Recurring Deposit
    "Average service"
    KOTAK MAHINDRA BANK
    0.5 3.0/5 "Satisfactory"
    I have a Recurring deposit account with KMB from last 8 months, i invest an amount of Rs 500 every month. Customer support was average with this bank and i was not much satisfied with the terms and conditions. I am not aware of the returns on investment.
    Was this review helpful? 1
    , bangalore
    Reviewed on Nov 29, 2018
  • Oriental Bank of Commerce Recurring Deposit
    "Very good banking"
    ORIENTAL BANK OF COMMERCE
    0.5 5.0/5 "Blown Away!"
    I have a recurring deposit account with Oriental bank of commerce. Last 20 years before i have opened the account. I have been depositing the minimum amount of Rs. 500 every month. I have chosen the tenure period of 1 year earlier and i have increased the same. Since the bank branch is nearby, i have selected my deposit with oriental bank.
    Was this review helpful? 1
    , new delhi
    Reviewed on Nov 28, 2018
  • HDFC Bank Recurring Deposit
    "Good"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have a Recurring deposit account with HDFC Bank and it was taken before 1.5 years. I can maintain the account through net banking and it was easy. I have invested 50K for 2 years. I am getting 6.25% of interest rate which was okay. The customer service is average.
    Was this review helpful? 7
    , chennai
    Reviewed on Nov 23, 2018
  • ICICI Bank Recurring Deposit
    "Good Experience"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have a recurring deposit in ICICI. Every month i have been depositing a particular amount and i will be getting good benefits. I don't use the customer care service. Online services always I'm using and i will look up on. Every 1 year i have been renewing the Recurring deposit when its coming to my account. Somewhere around 7.5% interest rate i will get from this recurring deposit.
    Was this review helpful? 4
    , faridabad
    Reviewed on Nov 22, 2018
  • HDFC Bank Recurring Deposit
    "Its Better"
    HDFC BANK
    0.5 4.0/5 "Great!"
    They are providing interest for the RD amount, when I done the preclosure they are taking 2% of interest. I have deposit Rs.2 ,25,000 . I took the RD for 4 years. I done the preclsoure in 3 years. They didn't provide much interest. Normally I make the ecs payment.
    Was this review helpful? 2
    , chennai
    Reviewed on Nov 19, 2018
  • HDFC Bank Recurring Deposit
    "Good"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have a recurring deposit account with HDFC Bank. It was taken 2 months back. I am maintaining a salary account with them and they suggested me for RD. In returns I get 7% as an interest rate. I have to deposit monthly 1,000 rupees and the locking period is one year.
    Was this review helpful? 5
    , tiruchirapalli
    Reviewed on Nov 16, 2018
  • andhra Bank Recurring Deposit
    "Average service"
    ANDHRA BANK
    0.5 3.0/5 "Satisfactory"
    The service provided was very good with Andhra bank based on the recurring deposit,Customer service offered by them was very good,. At the end of the term I will get one reminder from them confirming that the amount is going to get matured.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Nov 16, 2018
  • Karnataka Bank Recurring Deposit
    "Good service"
    KARNATAKA BANK
    0.5 3.5/5 "Pretty good"
    Karnataka bank is giving good service for the recurring deposit . There is no annual charges for the account They are going quiet good response . Am getting income tax benefits too . Overall its average investments plan . It has some nominal good returns.
    Was this review helpful? 1
    , bangalore
    Reviewed on Nov 02, 2018
  • SBI Recurring Deposit
    "Overall good"
    STATE BANK OF INDIA
    0.5 5.0/5 "Blown Away!"
    The experience for a recurring deposit is good. There are no issues in the process. The customer support and response is fine too at State Bank of India as I had no issues to open this account. I am also happy with the interest earned. Till date no hassles.
    Was this review helpful? 11
    , bangalore
    Reviewed on Oct 27, 2018
  • Kotak Recurring Deposit
    "Not satisfied"
    KOTAK MAHINDRA BANK
    0.5 2.0/5 "Expected more"
    I have a Recurring Deposit account with Kotak Mahindra Bank from last 1 year, I deposit an amount of Rs 3000 every month and the returns are not that good. I have withdrawn the amount in 6-7 months and there was no penalty charged.
    Was this review helpful? 3
    , pune
    Reviewed on Oct 24, 2018
  • Axis Bank Recurring Deposit
    "Easy process"
    AXIS BANK
    0.5 5.0/5 "Blown Away!"
    It was very convenient to open a recurring deposit with Axis Bank. I can do it online and I did not have to visit the bank for any formality. The lock in period for this account is for a year. I can also close the account online too. I am happy with the process too.
    Was this review helpful? 10
    , bangalore
    Reviewed on Sep 04, 2018
  • HDFC Bank Recurring Deposit
    "Good service"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have opened a Recurring Deposit account in HDFC bank from last 1 year. I have to pay an amount of Rs 25000 every month and all the terms & conditions were explained by the customer support of HDFC bank. In returns i get 6% as an interest which is quite good.
    Was this review helpful? 21
    , new delhi
    Reviewed on Aug 30, 2018
  • IOB Recurring Deposit
    "Good Service"
    INDIAN OVERSEAS BANK
    0.5 5.0/5 "Blown Away!"
    I've a recurring deposit with the Indian bank. I am depositing 1000 rupees a month. There hasn't been any issues with the deposit so far. It is easy to start and make payments to the recurring deposit. Auto debit option is also there for the deposit.
    Was this review helpful? 14
    , ahmedabad
    Reviewed on Jul 28, 2018
  • IOB Recurring Deposit
    "Good Service"
    INDIAN OVERSEAS BANK
    0.5 5.0/5 "Blown Away!"
    I've two recurring deposit with the IOB, I am depositing 2000 every month. There is no additional benefits apart from the nominal interest they provide. It is easy to start a recurring deposit with the Indian bank.
    Was this review helpful? 11
    , ahmedabad
    Reviewed on Jul 28, 2018
  • Kotak Recurring Deposit
    "Excellent Service"
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    I had opened this account a long time back and i had opened it online and the process in taking it has been easy, i had been depositing 2000 every month. There has been a very good service which they had been providing so far. I had been doing everything through their mobile application and it had been easy in using it.
    Was this review helpful? 13
    , chennai
    Reviewed on Jul 17, 2018
  • City Union Bank Recurring Deposit
    "Good Service"
    CITY UNION BANK
    0.5 5.0/5 "Blown Away!"
    I travel every year with my family for that purpose I deposit Monthly 5000 which gets auto debited from the account. They also offers 7.1 % interest rate. The deposit was started from the branch and it has been a very good experience with their services.
    Was this review helpful? 17
    , chennai
    Reviewed on Jul 13, 2018
  • ICICI Bank Recurring Deposit
    "Good Service"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I've a recurring deposit with the ICICI bank. It is so easy to start recurring deposit with the iMobile App. You need to give the reference number to the bank and the whole deposit process is automated. The monthly deposit amount gets auto debited from the account.
    Was this review helpful? 13
    , chennai
    Reviewed on Jun 27, 2018
  • Kotak Recurring Deposit
    "Best"
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    I am having the recurring deposit account with the Kotak mahindra bank and I was not aware of the rate of interest. I would like to say that the response is fine one for me with the Kotak mahindra bank.
    Was this review helpful? 7
    , bangalore
    Reviewed on Jun 23, 2018
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Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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