RD Calculator

RD Calculation Formula

Interest on RD is compounded quarterly, in most of the banks and financial institutions. The formula for calculating RD is:

M = R[(1+i)^n-1]/(1-(1+i)^(-1/3))

Where,

• M = Maturity Value
• R = Monthly Installment
• n = Number of quarters
• I = Rate of interest/400

How is RD Interest Calculated?

Example 1:

Let us assume Amit, a software engineer from Bangalore, invests in RD by making monthly payments of Rs. 5,000 for a year, at the interest rate of 8%. His total savings value will be calculated as:

• R = 5000
• n = 4 (one year has four quarters)
• I = 8.00/400
• M = Rs. 62,647 

Hence, Amit will save ₹62,647 in one year. 

Example 2:

Raju from Chennai owns a small business and invests in RD by making monthly payments of Rs. 4,000 for a year, at the interest rate of 7%. His total savings value will be calculated as:

• R = 4,000
• n = 4 (one year has four quarters)
• I = 7.00/400
• M = ₹59,568

Hence, Raj will save ₹59,568 in one year.

Example 3:

Let us assume Priya invests in an RD by making monthly payments of Rs. 10,000 for a year, at the interest rate of 5%. Her total savings value will be calculated as:

• R = 10,000
• n = 4 (one year has four quarters)
• I = 5.00/400
• M = Rs. 1,19,760

Hence, Priya will save ₹1,19,760 in one year.

Benefits of RD Calculator

• Convenience: Easily calculate maturity amounts based on deposit, tenure, and interest rates for efficient planning.
• Time-Saving: Eliminates complex formulas, saving time on calculations.
• Financial Planning: Helps plan savings and provides insights for informed decisions.
• Comparison: Compare interest rates across RDs to find the best option.
• Free to Use: Available online at no cost, with unlimited usage for comparisons.

Tax Benefits Of RD

• Tax on RDs: TDS of 10% is deducted on RD returns if interest exceeds Rs. 10,000 in a year.
• SIP vs RD: SIPs, particularly in ELSS, are more beneficial for long-term, as equity gains are tax-free after one year.

The Recurring Deposit (RD) Calculator simplifies financial planning by providing accurate and instant calculations, helping investors make informed decisions about their savings. While RDs offer a secure and disciplined way to save, comparing them with other investment options like SIPs can help investors choose the most suitable plan based on their financial goals.