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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.

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RD Interest Calculator Reviews

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  • Kotak Recurring Deposit
    "Need improvement on customer support"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I am not getting any calls from Kotak to suggest the investment products but whenever my salary credits I used to invest the money with their recurring deposit, monthly I used to invest Rs.1000 and above . I won't recommend this RD for non customers.
    Was this review helpful? 0
    , bangalore
    Reviewed on Sep 14, 2019
  • HDFC Bank
    HDFC Bank Recurring Deposit
    "Good bank for future"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    HDFC gave me very good interest for my recurring deposit, every month I used to invest Rs.3000 for 6 months, finally I about to get Rs.18,000 without interest as per my RD, the bank gave me Rs. 18594 its really good, the online banking is very convenient.
    Was this review helpful? 1
    , bangalore
    Reviewed on Sep 14, 2019
  • HDFC Bank Recurring Deposit
    "Good Investment"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have a recurring deposit from HDFC. I have a salary account in HDFC hence i have chosen the same bank. I have been investing the money of Rs. 1000 every month and they are providing a interest rate of 7%. Once my salary is credited, my RD amount will automatically deducted from my account. There is a lockin period of 2 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on Sep 14, 2019
  • Kotak Recurring Deposit
    "Good investment for the future"
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    I had a Recurring deposit for one year with Kotak Mahindra, through netbanking I invested Rs.500 on monthly basis they gave around 7.5% of interest for the total amount. Now I withdrawn the benefits even there is no charges for pre matured as well. The online site is very convenient to invest the money.
    Was this review helpful? 0
    , chennai
    Reviewed on Sep 14, 2019
  • HDFC Bank Recurring Deposit
    "Can do better on the interest"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    Recently I opened HDFC recurring deposit, the interest rate is lesser around 7.25% fpr per annum, every month I activated ecs for Rs. 2000 it has the term of 18 months. There is no pre matured charges to take the liquidity. The online banking is convenient to check the RD transactions as well.
    Was this review helpful? 0
    , bangalore
    Reviewed on Sep 05, 2019
  • HDFC Bank Recurring Deposit
    "Really useful for the people for savings purpose."
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    HDFC People has provided me a RD account when i opened my salary account hence every month Rs. 1000 has been deducted from my account. I get a quick response from HDFC. Their interest rate is quite good. There is no additional charges and there is a lockin period of 18 months.
    Was this review helpful? 0
    , indore
    Reviewed on Sep 01, 2019
  • ICICI Bank Recurring Deposit
    "Best Investment"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have been investing the money through recurring deposit. Since i have a salary account from ICICI, i have chosen the RD with them. I am investing Rs. 2000 every month and the rate of interest is 7.9% which is fine for me. Once the salary is credited to my amount, by next second automatically the amount is deducted from my account.
    Was this review helpful? 0
    , bangalore
    Reviewed on Aug 31, 2019
  • HDFC Bank Recurring Deposit
    "Good Savings scheme"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have a basic recurring deposit in HDFC. In HDFC, they themselves deducting the money of Rs. 1000 every month for a recurring deposit. The interest rates are good which is more than 7%. There is no additional charges. There is no lockin period and i can canceled it any time. The time which i have chosen for 27 months.
    Was this review helpful? 2
    , chennai
    Reviewed on Aug 26, 2019
  • HDFC Bank Recurring Deposit
    "Good saving for future"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    When I opened salary account I got the RD along with that, I am investing the money on the monthly basis, the rate of interest for RD is good. They are doing auto deduct from the account balance, I can view the RD transaction through netbanking.
    Was this review helpful? 0
    , bangalore
    Reviewed on Aug 23, 2019
  • HDFC Bank Recurring Deposit
    "Good savings scheme"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have been maintaining Recurring Deposit account with HDFC, I have opt for one year of recurring deposit. I am investing the money of Rs.2000 per month, the interest rate is good as per th RBI guideline. There is no charges for holding this. Good saving and getting benefited from this.
    Was this review helpful? 2
    , bangalore
    Reviewed on Aug 22, 2019
  • Union Bank of India Recurring Deposit
    "Safe and Secured investment"
    UNION BANK OF INDIA
    0.5 4.0/5 "Great!"
    Currently Union of Bank is offering 7% of interest per annum for the recurring deposit investment. The online option is very good to make the deposits without going to the bank. I can deposit minimum of Rs. 500 to max period, I have option increase the tenure period as well.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jul 29, 2019
  • HDFC Bank Recurring Deposit
    "Good for saving"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have been maintaining RD account with HDFC, I have opt for one year of recurring deposit. I believe we can deposit Rs.5000 per month, the interest rate is good as per th RBI guideline. There is no charges for the liquidity before the maturity period it won't cover tax.
    Was this review helpful? 2
    , kolkata
    Reviewed on Jul 29, 2019
  • IDBI Recurring Deposit
    "With LIC, you can trust them even more"
    IDBI BANK
    0.5 3.0/5 "Satisfactory"
    The interest rate was good for Recurring Deposit. I believe, IDBI is providing around 8 to 9%. I have done it for one year before 2 years back. The bank is next to my place and their staffs were friendly. They are easily accessible and any queries will be solved in time.
    Was this review helpful? 3
    , bangalore
    Reviewed on Jul 26, 2019
  • SBI Recurring Deposit
    "Good investment plan"
    STATE BANK OF INDIA
    0.5 3.0/5 "Satisfactory"
    I am investing the amount of Rs. 1400 every month and the given interest rate is very low which is between 2 to 3%. For the saving purpose i have chosen this account. Through auto debit, I'm paying the amount. There is a lockin period for 1 year and there is a no service charges for my Recurring deposit.
    Was this review helpful? 3
    , bangalore
    Reviewed on Jul 25, 2019
  • ICICI Bank Recurring Deposit
    "Good"
    ICICI BANK
    0.5 4.0/5 "Great!"
    ICICI BANK is convenient to do my transactions with one bank and also the customer service is good so have opened my Recurring deposit account. Its been 4 to 5 years and the benefits are as per the market price. I could manage my account online.
    Was this review helpful? 0
    , pune
    Reviewed on Jul 24, 2019
  • Axis Bank Recurring Deposit
    "GOOD"
    AXIS BANK
    0.5 5.0/5 "Blown Away!"
    I am using the AXIS BANK services since from last 7-8 months, the reason for getting the R.D was it was a salary account. The rate of interest was 7.25%, to open the account it is good. There is a application is good and it is good to use with the bank.
    Was this review helpful? 3
    , bangalore
    Reviewed on Jul 20, 2019
  • HDFC Bank Recurring Deposit
    "Good"
    HDFC BANK
    0.5 4.5/5 "Excellent!"
    I have invested my money with HDFC BANK. I can manage the recurring deposit account online. I have compared with the different bank but the rate of interest is more or less same. I never contacted the customer service. The locking period is one year.
    Was this review helpful? 2
    , gurgaon
    Reviewed on Jul 20, 2019
  • ICICI Bank Recurring Deposit
    "Good investment for future"
    ICICI BANK
    0.5 4.0/5 "Great!"
    I opened one year of recurring deposit with ICICI bank, on monthly basis I used to deposit Rs. 5000 even I have option to prolong the duration. The interest rate is good for the long term investment when compared to others. They are helpful in RD queries.
    Was this review helpful? 2
    , bangalore
    Reviewed on Jul 19, 2019
  • SBI Recurring Deposit
    "AVERAGE"
    STATE BANK OF INDIA
    0.5 3.0/5 "Satisfactory"
    I am having the STATE BANK OF INDIA recurring deposit, to open the account it is with lesser paper work but it is a little lengthy process. The customer support is not good with the banking process. The online banking process was easy and good.
    Was this review helpful? 4
    , kolkata
    Reviewed on Jul 17, 2019
  • HDFC Bank Recurring Deposit
    "GOOD"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I am having the recurring deposit with the HDFC BANK where there are charges are applicable with the pre mature. The application and Internet banking is good with the banking process. The customer support is good and also they are responsive.
    Was this review helpful? 0
    , kolkata
    Reviewed on Jul 17, 2019
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