Recurring Deposit calculator gives a rough estimate of future savings based upon your periodic investments, frequency, bank’s interest rate, and time horizon of investment. It uses the power of compounding to grow your savings.

A recurring deposit (RD) is an investment instrument similar to fixed deposits. However, one has to make monthly fixed deposits in RDs, unlike a lump sum amount in FDs. Recurring deposits are offered by various banks and financial institutions in India. The RD returns calculation could be pretty complicated for a common person to grasp accurately every time. Hence, this is where Fintra's RD calculator proves to be immensely beneficial.

Since the RDs are constant investments, their returns on the deposits could be challenging to track. Interests are compounded quarterly, and there are various variables involved that make these calculations multipart. Therefore, an RD deposit calculator reduces the hassles of computing the returns manually and enables the individual to know the exact amount the deposits will accrue after the relevant period.

However, while calculating, the individual has to manually do the TDS deduction, and the new RBI norms state that RDs are also liable for TDS deduction. However, there's no concord in the implementation across the financial institutions, which is why RD calculators don’t take it into account.

- Our RD calculator enables you to plan your future finances with greater clarity by presenting you with the exact amount your investment will accrue.
- The calculator is convenient to use and will save you time.
- The calculators' accuracy can never be in question. Accurate estimates are crucial for doing prudent financial planning.

The few major factors that are taken into consideration when deciding how much rate of interest should be given to the depositor are:

**Tenure:** Tenure is the duration of the money that is invested in a recurring deposit. Tenure is one of those factors on which the interest depends on, and the RD interest rates vary all tenure options.

**Age of the Applicant: **As an example, financial institutions such as banks provide higher rates of interest to senior citizens, it may range from 0.50% to 0.75% additional interest on the regular deposit rates.

**Current Economic Environment:** Banks that provide recurring deposits keep updating their interest rates as per the economic conditions. For example, a few of the reasons for the changes in economic conditions might be the change in RBI's repo rate, inflation and so on. Therefore, it's the prevailing conditions that play a vital role in determining the RD rates.

While deciding which RD to opt for, it is vital to know what combination of instalment, rate of interest, and deposit tenure would lead to better returns. Fintra's RD Calculator aims to do just that. The four fields to fill in for ascertaining your potential earnings while investing in a recurring deposit are:

- Monthly Deposit Amount
- RD Frequency
- Annual Interest Rate
- Deposit Tenure in Years

Hit the 'Submit' button and the results will appear on the side of the calculator. Please note the amount calculated is applicable if the interest is compounded quarterly.

Most banks which offer recurring deposits compound the interest quarterly. In India or the maturity value of RD, banks use the following formula for doing the RD interest calculation:

(Maturity value of RD; based on quarterly compounding)

M =R[(1+i)n – 1]/1-(1+i)(-1/3)

The letters stand for:

M = Maturity value of the RD

R = Monthly RD instalment to be paid

n = Number of quarters (tenure)

i = Rate of Interest / 400

Instead of manually completing this calculation, you can easily use the Fintra's Recurring Deposit Calculator, and narrow down the best combination to earn better returns.

**What are the benefits of RD?**

- RDs are used as collateral for obtaining loans- Up to 80-90% loans you can take on your RD amount
- Under RD, premature withdrawals are allowed, but it may come with a small penalty
- RD schemes offer a slightly higher rate of interest, 0.25% to 0.75% more for senior citizens
- Even minors can open RD accounts under the supervision and guardianship of their parents
- RDs tenure is flexible; you can pick from 7 days to 10 years depending on convenience
- RD schemes enable you to save money regularly, and the minimum deposit amount is RS. 10

**Tax Benefits on RD**

- Like other personal tax-saving and investment instruments, Recurring Deposit schemes also attract taxes. On the returns accrued from RD, TDS of 10% deducts, if the total interest exceeds Rs. 10,000 in a single financial year.
- Compare RD to the SIP scheme, you'll notice SIPs are more beneficial for the long term. Long-term gains from equity are tax-free, any SIP that invests in ELSS (Equity Linked Mutual Funds) is also tax-free after one year.

**Who Can Invest in Recurring Deposits?**

It is a viable option, investing in recurring deposits, for those who don't have a huge amount of funds but seeking for low-risk investment options where higher returns are obtained with regular deposits.

Any Indian resident and Hindu Undivided Families (HUFs) can open a Recurring Deposit with their bank. A few banks even allow minors to open an RD to build the habit of saving. However, guardians to supervision are required over the minor's finances. Banks sometimes request their customers to set an amount in multiples of 100.

**What are the minimum and maximum tenures for which you can open an account in RD?**

The minimum period of deposit starts from 6 months and can be extended to the maximum period of 10 years in most RD Accounts.

**Is TDS applicable on interest earned through RD?**

As per the Income Tax Law, TDS of 10% is applicable on the interest gained on Recurring Deposits. TDS will deduct if the interest earned on the Recurring Deposits is higher than Rs. 10,000.

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