R.D. (Recurring Deposit) Calculator is a Financial Planning tool that helps investors understand their potential return after a certain timeframe. Recurring deposits are fixed monthly deposits that introduce an individual to regular savings methods. RD calculator helps to comprehend the estimation of RD earnings and makes calculations uncomplicated.
RD Calculator is an online calculator that works by putting in Monthly Deposit Amount, Interest Rate, and Tenure. The manual deduction of TDS from the calculated value is the only point of consideration for investors. Although the RD calculator does not incorporate them enactment of the deductions can vary across the financial institutions.
Advantages of RD Calculator
By making complex calculations quick and easier, providing accurate information on investments' maturity level, and eliminating human error. RD calculator offers numerous benefits which are as follows:
Free tool: RD Calculator is a free-of-cost tool that can be used over and over again. It provides unlimited access and no cost involved which helps users to make better financial strategies.
Time-saving: RD calculator helps to refrain from remembering complicated formulas and allows instant results that help save time and make the lengthy process hassle-free.
Accurate Calculations: Reduces human error and precisely calculates the given inputs ensuring unwavering accuracy.
How to evaluate RD maturity
To calculate RD maturity there are 3 key variables involved. An RD account calculator uses a standard recurring deposit formula which is dependent on these variables to get the exact maturity amount.
Below mentioned is the formula for RD maturity:
A = P*(1+R/N)^(Nt)
Representation of the Variable in the above equation is as follows:
| Symbol | Meaning |
| A | Maturity Amount |
| P | RD Installments (Monthly) |
| R | Interest Rate of RD in percentage |
| N | Compounding Frequency (no. of quarters) |
| t | Tenure |
This is a standard formula to calculate RD maturity amounts, regardless of investment duration or investment amount.
For example, a person starts with an investment of Rs. 7000 as an RD per month for 1 year (equivalent to 4 quarters) and an interest rate of 8%. Let us calculate the maturity amount of an RD with the above formula i.e.
A = P*(1+R/N)^(Nt)
By adding the values we get,
= 7000*(1+.0825/4)^(4*12/12) = 7595.61
= 7000* (1+.0825/4)^(4*11/12) = 7544.10
= 7000* (1+ .0825/4)^(4*1/12) = 7047.79
For the specific given example after summing up this series, the total maturity value we get is ‘A’ = Rs 87,705.28
Interest Earned = Rs 3,705.28
Total Amount Invested = Rs 84,000.00
Now solving such equations manually will take a lot of effort time and precision but the RD calculator makes the process quick and accurate.
How to use the Retire with Rohit RD calculator online?
Using an RD calculator online is a no-brainer users just have to follow simple steps and put correct values to achieve correct results. Here are the quick steps for using the online calculator.
Once you open the Retire with Rohit online RD calculator you have to input the information i.e. Monthly Amount, Interest Rate, and Tenure in the RD calculator, Users either can manually type that or can use the slider option which allows them to adjust the monthly amount.
Step 1: Enter the Monthly amount of the recurring deposit in rupees.
Step 2: Specify the “Interest Rate%”.
Step 3: Provide the “Tenure” (in years).
Step 4: After all the details are there your results start reflecting at the very same time.
Step 5: Results will have Maturity Amount, Interest Earned, and Total Invested Amount in
Rupees.
Factors determining RD Interest Rates
RD interest rates depend upon a series of factors let's understand some of them:
- Investment Amount: Banks typically offer higher interest rates on huge investments which means Interest rates are influenced by the amount invested.
- Investment Time: For long-term investments banks offer high interest rates so the longer tenure generally leads to better interest rates.
- Banking and Non-Banking Financial Institutions: Another important aspect while checking or comparing interest amounts is the Banks or financial institutions, as different banks and institutions offer different rates on RDs.
- Current Market situations: Current situations like Inflation, Monetary Policy and Credit Risk also affect the RD interest rates.
Conclusion:
Using Retire with Rohit’s RD calculator allows users to understand the interest calculated on any RD amount by simply inputting the information without any time-consuming conventional calculations. Moreover, RDs are considered a secure and conventional option for investment so to get the best interest rates from it one just has to compare the different options available in the market with the preference that best suits you and here when an RD calculator comes into play that provides you quick results for comparisons and one can have the information at the ease of few clicks without seeking any help from RD providers.
FAQ
What is better RD or FD?
FD refers to a Fixed Deposit in FD the interest rate is higher as it’s a long-term investment that at least lasts for more than a year. However, RDs are more adjustable as they provide to invest in small amounts.
Can I withdraw my RD amount anytime?
Yes, it is possible to break the RD anytime users just have to either online or offline close it but the interest rate you’ll get on the amount is up until the closure date and is 0.5% to 1% less than the interest amount promised at the opening of RD depending on the financial institution.
Is Tax included on RD?
Yes, RDs are subject to taxation, as interest arising from RDs will be a part of the annual income of any individual so it is accountable to be taxed under income tax slab rates.