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If you are planning to save a monthly fixed amount from your income and invest in any RD (Recurring Deposit) account offered by different banks and post offices (PO) in India, then you have come to the right place. Our RD Calculator (also known as an RD account calculator, yearly recurring deposit calculator, or annual RD calculator) is an excellent and simple tool to quickly estimate the maturity amount of your RD account.
What is a Recurring Deposit (RD)?
A Recurring Deposit (RD) is the monthly savings scheme offered by financial institutions in India, such as banks or post offices. Unlike fixed deposit (FD) accounts, you do not deposit a lump sum; instead, you choose to deposit a fixed amount each month into your RD account on which you earn an interest rate that is usually compounded quarterly. Interest rates offered by financial institutions are generally higher than those of regular saving accounts. Thus, a Recurring Deposit helps you adopt the financial discipline of saving a part of your monthly income so that you can create long-term wealth.
RD Maturity Calculation Formula
Our RD Calculator uses the standard RD formula for calculating the maturity value. Typically, financial institutions in India compound interest rates quarterly or every 3 months with recurring deposits. This indicates that interest is earned on the principal amount and interest for the last three months. The standard formula to calculate RD maturity amount is:
RD Maturity Formula:
M = R × { (1 + i)n − 1 } / { 1 − (1 + i)−1/3 }
- M = Maturity amount
- R = Monthly deposit amount
- i = Quarterly interest rate = (Annual-Rate/100) ÷ 4
- n = Total number of quarters in the tenure
RD Calculation With Example
Based upon the above formula, we will find out how to calculate the maturity value for recurring deposits. Let’s assume you plan to deposit ₹5,000 monthly for 1 year and the interest offered by your bank or post office is 8%. Here’s the value that will plug into the formula:
- Monthly installment (R) = ₹5,000
- Annual rate of interest = 8%
- Quarterly Rate (i)= (8 / 100) ÷ 4 = 0.02
- Number of quarters (n) = 4
Substituting the value in formula -
RD Maturity Formula:
M = 5000 × { (1 + 0.02)4 − 1 } / { 1 − (1 + 0.02)−1/3 }
After doing the calculation the maturity value would come - ₹62,657. Doing such calculations manually is often time consuming. So for a quick answer you can use this RD calculator. which produces an almost accurate estimate for the maturity value on the RD account.
How this RD Calculator Works
This RD calculator is very simple and fast to use which can help you compare the best RD plan and choose the right financial institution for the recurring deposits. It requires fewer inputs such as monthly investment, rate of interest and tenure. This is how it works step by step :
- Step 1 - Enter Monthly Deposit Amount: Enter the amount that you wish to deposit on a monthly basis in your RD account. You can also use the slider to move and choose the monthly investment.
- Step 2 - Enter interest rate: Enter the annual interest on RD deposit provided by your financial institution or bank.
- Step 3 - Select the tenure: Enter the tenure years that your planning for RD,you can also use the slider to select the time
- Step 4 - Result Ready: This is an automatic RD calculator as you enter or make any change in the value, the output value is automatically updated.
As you enter the value in this RD calculator, it shows you the maturity amount and total interest earned along with pie chart and a table
Advantages of Using Our RD Calculator
Here's how our RD calculator can be really helpful for you in forecasting the future return on RD deposit and making more informed financial decision.
1. Saves time & effort in calculation
Manually calculating the RD maturity is a complex task that requires effort. With our RD calculator, you can easily compute the RD maturity value with compounding frequency options.
2. Perfect for future financial planning
With this RD Calculator you can check the RD maturity amount for different values and compare the schemes of various financial institutions before making the final decision. Thus it helps you make the correct decision aligned with your financial goals, such as education, marriage, property buying etc.
3. Visualize the growth over tenure
RD calculator helps you visualize the growth of your monthly deposit over the tenure. It presents you with a beautiful pie chart and monthly table where you can check the monthly interest rate credited into your RD account.
4. Compare Various Banks Rate Easily
Various banks in India offer different interest rate on RD account. This RD calculator helps you compare them and find out which plan gives the best return yield.
Recurring Deposit (RD) Interest Rates by Banks
Interest rate on RD schemes offered by different banks in India varies from bank to bank. It often depends upon the tenure length and the depositor's age category. Below are indicative RD interest rate ranges offered by major banks and post office in India.
| Bank / Institution | General Public (p.a.) | Senior Citizens (p.a.) | Tenure |
|---|---|---|---|
| Post Office RD | ~7.3% | ~7.3% | 5 Years |
| SBI Bank RD | 6.5% – 7.0% | 7.0% – 7.5% | 6 Months – 10 Years |
| HDFC Bank RD | 6.6% – 7.75% | 7.1% – 8.25% | 6 Months – 10 Years |
| ICICI Bank RD | 6.7% – 7.8% | 7.2% – 8.3% | 6 Months – 10 Years |
| Axis Bank RD | 6.5% – 7.5% | 7.0% – 8.0% | 6 Months – 10 Years |