RD Calculator – Online Recurring Deposit Calculator

By TBS Team | May 18, 2024

In recurring deposit, a person deposits a fixed amount of money every month for a chosen tenure. The deposited money gains interest over a period of time and the matured amount is given to the investors at the time of maturity. Here you can use our RD calculator to check what amount you will get at maturity by investing certain amount monthly over your chosen period.

In comparison to fixed deposits, recurring deposits are more flexible and easier. This is because people don’t need to invest a large sum of money at a time. Instead, they can choose to make smaller deposits on a monthly basis and save that money over a long term.

RD Calculato

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M

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Total Investment
Rs.
Total Growth
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Final Valuation
Rs.

How to use this RD calculator?

  • To use this RD calculator, first the person needs to enter the amount he wants to deposit monthly
  • Then put the time period (in months)
  • Put the interest rate given by banks or your RD provider.
  • After these things entered, this recurring deposit calculator would show up the results in no time.

A recurring deposit calculator is very easy to use and can be used by almost anyone. With the availability of RD calculator online, calculating the maturity amount in a recurring deposit has become a child’s play.


What is the formula for RD calculator & how it works?

For you, it is necessary to know that the interest is calculated on a quarterly basis. RD calculator formula is defined below:

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

In this,

M = Maturity Value

R = Monthly Deposit Value

n = Number of quarters

i = Rate of interest/400

For example, if you invest a sum of Rs. 6000 in a recurring deposit for 12 months with an interest rate of 7%, the total maturity value can be calculated as given below:

here R= 6000, n =4(1 year= 4 quarter), i = 7/400

M = 6000[(1+7/400)^4-1]/(1-(1+7/400)^(-1/3) )

So Maturaity Amount, M = Rs. 74, 773
Total Deposited Amount = 6000*12 = 72000
Total RD interest Received = 74773-72000 = 2,773

How to calculate the RD interest?

Bank services have changed dramatically as a result of the digital revolution in banking. On their websites, some banks feature recurring deposit interest calculators. How to compute interest on RD accounts is covered by this tool.

To determine the RD interest, you need to input the following in rd interest calculator:

  • Installment amount
  • Rate of interest
  • Period of investment

After entering this information, you must click submit so that the calculator can display the maturity amount. You can immediately determine the total rd interest you can receive on a recurring deposit by using this rd calculator. You can also calculate the rd interest rate with the help of total deposited amount and total maturity amount byRD interest rate calculator. One thing to keep in mind is that banks compound interest on these deposits on a quarterly basis.

More About Recurring Deposit Interest Rates

  • Recurring deposit interest is taxed. You will be required to pay tax on this interest based on the tax bracket you are in as it will be included in your taxable income.
  • If the total interest on your recurring deposit reaches Rs. 10,000 in a year, your bank will deduct tax. You can file Form 15G/15H to indicate that your income will not be subject to taxation. The bank won’t deduct tax from your recurring deposit income upon completion of this form.
  • Under Section 80TTB, senior persons are eligible for an interest deduction of up to Rs. 50,000. Savings account interest, fixed deposit interest, recurring deposit interest, etc. interest is all deductible under Section 80TTB.

Benefits of using RD Calculator

There are numerous benefits of using a recurring deposit calculator online including:

  • Easy to use: Using an RD calculator is really simple. Inserting the numbers for the monthly deposit, the RD rate, and the number of years of investment is all that is required. The maturity amount is precisely calculated using the RD calculator.
  • Time-saving: An investor can save precious time by using an RD calculator. In a couple of seconds, it completes complicated computations. The investor no longer needs to deal with the hassle of laborious computations.
  • Accuracy: If you enter the proper information into the calculator, there is absolutely no risk of error.
  • Future Planning: Because the calculator gives investors the precise return on their investment, they may plan their future with great accuracy.
  • Easy Comparison: Banks and other financial entities provide RDs. Investors may quickly compare the maturity values of several RDs using an RD calculator.
  • Free to use: The RD calculator can be used as many times as necessary by the investor to determine the returns from RDs with various tenures and interest rates.

Benefits of Recurring Deposits

Recurring deposits have a lot of benefits. Here are a few notable examples:

  1. Reliable Returns: Recurring deposits are indicators of fixed income. This indicates that the profits on your investment will be set and guaranteed. These investments are steady, as opposed to market-linked securities, which makes it simple for you to set your financial objectives.
  2. Low Risk: Recurring deposits are regarded as reasonably secure investment vehicles since they are fixed-income securities. It can be a fantastic way for risk-averse investors to gradually build up a corpus.
  3. Disciplined Investing: You may develop a disciplined investing habit by setting up recurring installments. You will have the money automatically taken out of your account since you must invest on a regular basis.
  4. Simple to Open: Setting up a regular deposit is simple. One is simple to open online using your bank account. To make sure you maintain investing, you may also automate your investments.
  5. Simple Withdrawal: One of the major benefits of recurring contributions is the possibility of early account closure. If you have an immediate financial need, you can instantly shut the account and get the money. Although there can be consequences, it offers simple liquidity.
  6. Short-term Objectives: Setting up recurring payments might help you achieve short-term objectives. You can better plan your investment now that you are aware of the profits you will earn. To figure out how much money you should set aside for your financial objectives, utilise a recurring deposit calculator.

Tax Benefits of Recurring Deposits`

  • Income Tax on Recurring Deposit Amount

A bank RD investment is not free from taxation under Section 80C of the Income Tax Act of 1961. As a result, investing in any of the bank’s recurring deposits is not tax deductible.

However, under Section 80C of the Income Tax Act of 1961, a post office term deposit with a duration of five years is eligible for a tax deduction. Therefore, investing in post office TDs entitles one to tax advantages of up to INR 1.5 lakhs.

  • Income Tax on Accumulated Interest on A Recurring Deposit

It is taxed to receive interest income from a recurring deposit plan. The relevant tax rate is based on the tax slab rates for individual investors. To calculate the maturity amount on which income tax will be levied, utilise a recurring deposit calculator. The recurring deposit calculator online is free to use.

  • TDS on Accumulated Interest on A Recurring Deposit

When a PAN card is provided, the bank deducts TDS at a 10% rate. If a PAN card is not provided: If the PAN Card is not provided, the bank deducts TDS at a rate of 20%. The TDS threshold level is INR 40,000 for normal residents and INR 50,000 for senior people.

The Conclusion

Recurring deposits is an excellent strategy to develop a regular saving and investing habit. Recurring deposits have a lot of benefits. You can make regular, small-amount investments. The rate of return will be higher than with savings accounts. You may easily accomplish your short-term goals with the aid of recurring deposits. To take charge of your investing behaviours, find out more about deposit interest rates and start a recurring deposit account.

FAQs about RD & RD Calculator

1. Which is better FD or RD?

Though both are the popular investment options in India among people, RD is known be a bit better than FD. In contrast to FD, which demands a big sum investment, RD permits investors to consistently save modest sums each month. Ultimately, the investor’s choices and aims will determine whether to invest in FD or RD.

2. Can I withdraw RD anytime?

No. it is not like a savings account. A recurring deposit comes with a fixed tenure. If you forcefully withdraw amount from a RD, you are likely to pay the applicable penalty charges or forfeit the interest accumulated over the deposit.

3. How do you calculate %interest?

The interest rate on a RD can be calculated using the following formula:

A = P(1+r/n)*n*t, where ‘A’ stands for the maturity amount, ‘r’ for the annual interest rate, ‘P’ for the principal, ‘t’ for the tenure, and ‘n’ for the number of times the interest has been compounded.

4. Is RD tax free?

There are no tax exemptions on recurring deposits. However, income tax is levied on the interest amount received on such deposits.

5. What is the post office RD 1000 per month for 5 years?

According to post office rd calculator, a monthly payment of Rs 1000 to the Post Office RD plan over the course of 5 years will produce a corpus of Rs 70,431. The entire corpus in 10 years, if you add another 5 years to the account, will become Rs. 1.66 lakh.

6. What is the minimum amount to start an RD?

One can start investing in a recurring deposit with an amount as low as Rs. 100.

Disclaimer: This blog is written for educational purpose only. Data, Securities, Advisory and Quotes mentioned here are for guidance only. Doing research by investors itself is highly recommended.

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