Recurring Deposit, also known as RD is an investment avenue similar to fixed deposits that help you get fixed and secured returns. You can invest a fixed sum of money each month and get returns after a specific period of time. Recurring Deposit is one of the most traditional forms of investment, helping you save money in a disciplined manner. Today, many banks and financial institutions offer recurring deposits facilities at attractive interest rates starting from 3.5%- 8%. On the maturity of the RD investment, the accumulated money is paid back to the investor. An RD calculator is an online tool that helps an investor get an idea of the returns he can expect on his RD investment.
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How to use the RD Calculator?
Using a recurring deposit calculator can make it easy for you to calculate the returns you can expect on your investment. The calculator makes it simple for you to calculate and plan your future investments based on the returns you can get on your RD investment. In case you are not happy with the returns you can expect within the tenure chosen and the interest rate offered by the bank, you can either opt for RD with another bank offering a high rate of interest or make changes in the tenure to fulfill your desired financial goals.
Here is how you can use RD calculator:
- Enter the monthly deposit amount you wish to invest
- Enter the rate of interest the bank is offering on an annual basis. You can make use of the slider to change the interest rate
- Enter the tenure for which you want to invest. You can choose to invest in RD for a period of 1-10 years.
On entering the above details, you will get an estimate of the amount you invest, the estimated returns you can get on your investment and the total value of your investment. These details will give you an idea if it is ideal for you to invest in RD or not.
How can RD Calculator help you? Benefits of using RD Calculator
As the name suggests, recurring deposit is a continuous investment that requires an investor to invest money at fixed intervals. The interest calculated on RD is compounded quarterly with various variables involved which can make it difficult for an investor to gauge the returns he can expect on his investment.
The use of an RD calculator eliminates the hassles of doing manual calculations, hence, reducing the time and effort required to do so.
When investing in recurring deposits, it is imperative for an investor to know that RDs are liable for tax deduction. However, not all banks and financial institutions offer this due to which the RD calculator does not take into account the tax calculation part.
Below are a few of the benefits of using an RD calculator
- Provides an idea to the investor on the returns he can expect in the future
- Easy to use, hence, saving time of the investor from doing calculations manually
- Offers accurate results, hence, making it easy for the investor to carry out future financial planning
- Various banks and financial institutions offer different rates of interest on RD investment. Using the RD calculator, an investor can compare the maturity value of different RD investments in just a few seconds.
- The calculator is free to use and the investor can do multiple calculations to calculate returns at various interest rates within different tenures.
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Where can I use the RD calculator?
You can use the RD calculator online on InsuranceDekho to get accurate idea on the returns you can expect on your RD investment.
How is RD amount calculated?
RD amount is calculated using the below formula
A = P(1+r/n) ^ nt
Here A stands for maturity amount, P stands for RD installment you pay each month, N for compounding frequency, R rate of interest charged in percentage and T for tenure.
What are the advantages of using an RD maturity calculator?
Using RD calculator provides you with the below benefits:
- Time-saving. Calculate maturity amount in just a few seconds
- Accurate. Get error free results
- Free to use. Use it as many times as you want by including different variations in terms of interest rate, tenure and investment amount