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A common challenge people face when starting out on their investment journey is consistency. An important rule of investment to live by is to invest regularly. Tiny droplets make a mighty ocean. Likewise, investing even a small sum of money regularly can help you grow your corpus and achieve your financial goals over time. A good way to start on this disciplined financial journey is to invest in a recurring deposit (the full form of RD). This online RD calculator helps you calculate the maturity and interest amount you can earn on your recurring deposit (RD) investment.
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A recurring deposit calculator is a tool that will help you calculate your RD maturity amount within a matter of seconds. There are many RD calculators online that will eliminate the need to compute the complex RD calculation formula to arrive at the exact maturity amount. You simply input the relevant variables and get your investment maturity amount.
Using an RD calculator will give you the following advantages:
However, one thing to note with RD calculators online is that they usually do not take taxation into account.
The interest earned on RDs is taxable. If the total interest earned by an individual from RDs exceeds ₹10,000 in a financial year, a TDS of 10% will be deducted at the source.
All interest earned from RDs needs to be shown as income from other sources when you file your tax returns.
Most of the online RD calculators do not reflect tax but the ET Money RD calculator helps you to calculate the maturity amount, both before tax & after-tax deduction as per your income tax slab.
ET Money's RD return calculator is a handy online tool that will help you painlessly compute your RD maturity amount. All you need to do is enter:
The amount you wish to save periodically
Interest rate offered by the bank, you wish to invest in
Tenure of your investment
After you have filled in this information, tell us whether or not you are a senior citizen and calculate your RD maturity. Using our RD calculator, you can see your total investment, interest earned and investment maturity amount within seconds!
Most banks calculate interest on recurring deposits on a quarterly basis. The interest amount is compounded. The maturity amount is simply a sum of each installment and the corresponding accumulated interest amounts. RD calculations can be complex.
Therefore, it may be best to use the many RD interest calculators online that will help you. These recurring calculators provide the RD maturity amount, including the interest you earn. ET Money's RD calculator is one such tool designed to help you calculate recurring deposit interest and maturity amounts with ease.
There are two methods to calculate interest on fixed deposits - simple interest and compound interest. Let us look at both of them.
To calculate interest on RDs, the formula is:
M = P*(1+R/N)^Nt
M = Maturity amount
P = Amount of periodic investment
R = Interest on RD in decimals
t = Tenure or time duration of RD
N= Compounding frequency (Most often, this is 4, since interest is compounded quarterly)
This is the standard RD calculation formula used to arrive at the maturity amount. If you input all the necessary variables such as the RD amount, tenure, and interest rates, the online calculator will arrive at the maturity amount.
For example, let us assume you start an RD with a monthly investment of ₹1,000 for a period of 1 year. This comes up to 4 quarters. The interest provided by the bank remains stable at 4.90% over the period of your investment. When you use the recurring deposit formula to calculate recurring deposit interest and maturity as provided above, this is what you will get:
| Month | Formula {A = P*(1+R/N)^(Nt)} | RD Maturity Amount |
|---|---|---|
| 1 | 1000*(1+0.049/4)^(4*1/12) | 1,004.07 |
| 2 | 1000*(1+0.049/4)^(4*2/12) | 1,008.15 |
| 3 | 1000*(1+0.049/4)^(4*3/12) | 1,012.25 |
| 4 | 1000*(1+0.049/4)^(4*4/12) | 1,016.37 |
| 5 | 1000*(1+0.049/4)^(4*5/12) | 1,020.50 |
| 6 | 1000*(1+0.049/4)^(4*6/12) | 1,024.65 |
| 7 | 1000*(1+0.049/4)^(4*7/12) | 1,028.82 |
| 8 | 1000*(1+0.049/4)^(4*8/12) | 1,033.00 |
| 9 | 1000*(1+0.049/4)^(4*9/12) | 1,037.20 |
| 10 | 1000*(1+0.049/4)^(4*10/12) | 1,041.42 |
| 11 | 1000*(1+0.049/4)^(4*11/12) | 1,045.66 |
| 12 | 1000*(1+0.049/4)^(4*12/12) | 1,049.91 |
| Total | 12,321.99 | |
As you can see, the recurring deposit formula is complex. This is why recurring deposit calculators, i.e. RD calculators online, can be simpler to compute your RD maturity amount.
