Are you thinking to make monthly Recurring deposits (RD) as a saving for your future, than you should use moneycontain free RD Calculator to calculate your maturity amount you would get in future.
Using this RD calculator will help you to be well aware of your financial goals, moreover it helps you in knowing the expected amount you will get after making monthly Recurring deposits for X no. of months or year.
To use the moneycontain RD calculator you just need to enter the regular monthly deposits, enter the investment period (in months) and select the expected rate of interest.
That’s it, the RD calculator will show you the future value of your investment with interest earned and total investment made by you in microseconds. Try it yourself by entering the detail below:
What Is Recurring Deposit (RD)?
In simple terms Recurring Deposit or famously known as RD is a type of fixed term deposit on a monthly basis in your Recurring Deposit account opened by either bank or any NBFC (Non-Banking Financial Company).
When you are saving a fixed amount of money every month through RD, banks or NBFC’s give you compounded interest rate on quarterly basis, which makes your investment grow over a period of time.
Once the maturity period of your RD is over you would receive the lump sum amount with interest. This type of financial instruments gives you peace of mind as the returns are already fixed and does not fluctuate with any adverse market movements.
Moreover with the flexibility of every month deposit it makes a good habit of saving some money for your future as well. If we talk about other form of investments such as Monthly SIP in an mutual fund, the returns are not guaranteed, It may give you higher or lower return than your expectation.
That is why usually people prefer to invest in RD more compare to any other form of investment. Recurring deposits are made for fixed time period which ranges anywhere between 6 months to 10 years usually.
Therefore Moneycontain Online RD calculator can be a great tool if you are looking to make any investment through RD.
How Much Interest RD Gives In India?
Interest earn on RD are generally ranges between 5% to 9% it also depends upon the bank or NBFC you are choosing to make the RD. Moreover the tenure plays a significant role in returns, longer the tenure of investment more returns can be earned and vice-versa.
Check out the below image to know the Best RD returns providing bank in India 2023:
Best RD Returns By Banks In India 2023:
Note: Returns shown in above image can be changed by bank depending upon their policies, kindly confirm with the banks about all details before making RD.
How To Use Moneycontain RD Calculator?
How To Use Moneycontain RD Calculator?Using moneycontain fixed deposit RD calculator is FREE and very easy to use, it just involves 3 steps :
Enter the amount you want to invest
Enter the expected return from your bank or NBFC
Enter the Time duration of your RD in months
That’s it, moneycontain RD calculator will do the rest for you by telling the amount you will get upon maturity, total amount invested till date as well as the total interest you have earned over your investment.
The Recurring deposit interest calculator or RD calculator can be used by any investor who wants to invest in Recurring deposit and wants to get an estimate of wealth to be gained for a given investment amount.
It is very important for an investor to know the expected amount in advance and before making the investment. This will ensure whether the selected investment option will serve the financial goal of the investor at the maturity or not. Once an investor has the financial goal in his mind, he can also decide on which investment option to select.
For example: Let say, Priya is thinking to invest some money for her daughter who just turns 8 this year, she wanted to make sure, when her daughter turns 18 she can give her a support in education.
Priya can use moneycontain RD calculator to know the returns she can expect after 10 years. Suppose she decided to invest Rs.2000 rupees for a 10 year duration at a nominal interest rate of 8.5%. This is how much she will get on maturity.
How Accurate Is Moneycontain RD Calculator?
Moneycontain online free RD calculator is as accurate as any other prominent bank such as HDFC, Axis bank, ICICI BANK, for reference I have taken a snapshot from HDFC Bank website with the same amount, tenure and interest as I have used in moneycontain RD calculator.
Check this:
The 14 rupees (negligible) difference you see is due to date of making the RD, I have chosen 27 July 2020 as my RD date while calculating with HDFC.
What Is RD calculation Formula?
To calculate the returns from your RD the formula used in math is little complicated, i.e. why it is best to use a trusted online RD calculator such as moneycontain RD calculator. Below is the formula :
M=R[(1+i) (n-1)]/1-(1+i)(-1/3))
Where, M = Maturity value
R = Monthly Instalment
N = number of quarters (tenure)
i = Rate of interest/400
Monthly Instalment (R):
This is the amount that is invested in the RD account every month. The minimum deposit amount varies for every bank and can be as low as Rs 10.
Rate of Interest (I):
The amount of interest earned depends on the amount deposited in the RD account, the interest rate offered by the bank, and tenure of RD.
Tenure (N):
It is the duration for which money is held in the RD account. Generally, RD tenure varies between 6 months to 10 years.
RD VS FD Which Is Better?
To be straightforward FD (Fixed deposit) is better than RD (Recurring deposit) you may ask how FD is better than RD? to understand that we first need to do the comparison between both and after seeing the result you can easily decide which one is best.
The comparison is the interest earning potential, when you compare both these products, a fixed deposit fetches you more income than a recurring deposit.
Suppose you have invested Rs 36000 in a fixed deposit (FD) at start of the year and Rs 3000 p.m. in a recurring deposit (RD) for a year. Assuming both these products offer you a 8.5% rate of interest compounded quarterly.
(I have used moneycontain FD Calculator with inflation to calculate FD returns).
This is what you will earn from these two instruments:
As you can see, after a year you will receive Rs 39,158 in a fixed deposit while in RD you will receive Rs 37,702. So the recurring deposit earns you Rs 1,456 less than a fixed deposit.
The primary reason for this difference is that in FD you invest a lumpsum amount and so the entire money earns interest for one year.
But in a recurring deposit, RD the first installment earns interest for 12 months period, the second for 11 months, third for 10 months and so on. Due to this variation, FD is able to fetch a higher maturity.
Although FD earn higher than RD, but when you do not have a lumpsum to invest but can save a defined amount from your income every month, a recurring deposit is a more useful product.
With it you can achieve an objective of regular savings for your medium term needs. But when you have a lumpsum to invest then FD is a wiser choice.
Is Rd taxable on maturity?
Yes, interest earned on RDs is taxable however, Income tax is to be paid on the interest earned from a Recurring Deposit at the rate of the tax slab of the RD holder.
For example, If your annual income is less than Rs 2.5 lakhs the TDS (Tax Deducted at Source) of 10% is applicable if the interest earned exceeds Rs 10,000. You can also claim a refund on the TDS paid by submitting form 15G to the income tax department.
Whereas for annual income within the range of Rs 2.5 lakhs and Rs 5 lakhs the TDS of 10% is applicable if the interest earned exceeds Rs 10,000.
For annual income within the range of Rs 5 lakhs and Rs 10 lakhs, if the will be liable to pay a tax of 10.5% as the bank will deduct only 10% TDS if the interest earned exceeds Rs 10,000.
If your annual income is more than Rs 10 lakhs, if the person will be liable to pay a tax of 20% as the bank will deduct only 10% TDS if the interest earned exceeds Rs 10,000.
So all in all Tax Deducted at Source (TDS) is applicable on Recurring Deposits. If interest earned on FD AND RD exceeds Rs. 10,000 in a FY per Customer ID, TDS at the rate of 10% would be deducted by the bank.
Note: Please confirm your bank or NBFC company about the taxation benefit as the taxation keeps on changing.
Can we break Rd before maturity?
Yes, you can break RD before maturity, but after that your account will be closed. Banks may also deduct 1 or 2% percent penalty from the interest accrued on your RD amount for the period for which the amount was with the bank.
The minimum lock in period is 3 months and if the depositor request a premature withdrawal before that, he earns zero interest and only the principal amount will be refunded to him. Apart from cancelled interest, any incentives offered are also withdrawn.
What happens to RD after maturity?
On maturity of your RD account, you can ask the bank to transfer the principal amount and the accumulated interest component directly into your linked savings account. You can also invest your RD amount in fixed deposits after maturity.
Can we change Rd amount?
No, you cannot change the RD amount with your ongoing, however If you wish to invest more amount in Recurring Deposit please book a fresh (New RD) one with the tenure you wish too.
Is Rd eligible for 80c?
No, Rd is not eligible under 80c, Section 80C of the Income Tax Act has a long list of investments such as ELSS (Equity Linked Savings Scheme), PPF (Public Provident Fund), 5-year Fixed Deposit, Life Insurance Premium, ULIP, Senior Citizens Savings Scheme, etc. you can save on taxes from them, but unfortunately, recurring deposits (RD) isn’t one of them.
Is Rd interest rate fixed?
Yes, the interest rates for RD are fixed at the time of opening the account with your bank.
Is RD a good option?
Yes, without any doubt RD’s are the best way to save some money plus earn interest, they help meet both short-term and long-term goals. One that you have fixed rate of interest irrespective of market condition, second the tenure can be of your choice 6 months and goes up till 10 years, third the amount you can invest through RD can be as low as Rs.100 (even Rs.10).
What Is The Eligibility Criteria for RD?
- Any individual.
- Any minor over 10 years of age may open a recurring deposit account if he or she provides proof of his or her name.
- Any minor who is below or equal to 10 years of age under the guardianship of natural or legal guardian.
- Any corporate, company, proprietorship or commercial organization.
- Any government organization.
What Are The Documents Required To Open RD Account?
- Bank application form
- Passport size photographs
- Identity proof
- Address proof
- KYC documents if the bank requests for it
Can I Add Nominee to my RD Account?
Yes, you can add nominees in your Recurring Deposit account.
Can You Make Partial Withdrawal From RD account?
No, Partial withdrawals are not allowed. Also, you cannot opt for periodic pay-outs of just the interest component earned, however you can opt for FD in case you are looking for periodic payout every month.
Can I withdraw Rd anytime?
Yes, you can withdraw the Rd anytime, however the bank will charge a certain fee on the premature withdrawal of your RD. It is advisable to contact your bank to know the charges.
Can I change the nominee(s) for my RD?
Yes, You change the nominee(s) of the deposit accounts by making a declaration effect in the appropriate form to your bank.
Do Senior citizens get any extra benefit on RD?
Yes, they do get extra benefits in the form of higher interest rates in comparison to normal citizen.
Conclusion:
I hope you have tried calculating the returns by using the moneycontain RD calculator, doing a manual calculation takes much of time, therefore feel free to use the RD calculator anytime you want.
Doing an investment with less risk may give less returns but what is most important is the peace of mind. That is why people usually makes investment in RD/FD rather than any other form of investments.
Checkout the impact of inflation on your returns as well as your life using moneycontain inflation rate calculator and calculate your future expenses easily.
You can also check Moneycontain Monthly SIP Calculator with inflation to know how much need to invest today to reach your future financial targets.
In case you are looking to buy a home than please check this ultimate guide on home loan and Moneycontain home Loan EMI calculator. It calculates your EMI’s as well as Interest amount and lot more.
If you want to explore the stock market and how does it work step by step than check moneycontain Free share market guide specially designed for beginners.
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Note: Please do not take this as any recommendation, to trade or invest. This is just for reference, to make you understand more about the usage of RD calculator and its importance, under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset.
