A Recurring Deposit (RD) is one of the most popular and completely safe investment options. It offers you a fixed interest rate on your deposits and allows you to make periodic investments instead of putting in a lump sum amount at once. It is an ideal investment plan for individuals who do not have a huge sum of money to start a fixed deposit but can invest regularly from their income. Recurring deposits also promote long-term investing habits.
Benefits of Using an RD Calculator
Before opting for any RD plan, it is essential to compare returns from all available options. An RD calculator is a handy tool that allows you to compare various RD plans offered by different financial institutions. Here are some benefits of using an RD calculator:
- Accurate Estimates: Provides precise calculations of total investment, accrued returns, and maturity amount.
- Time-Saving: Eliminates the need for manual calculations, saving time and effort.
- Error-Free: Ensures accurate results, reducing the risk of manual calculation errors.
- Comparison Tool: Helps you compare different RD plans to make informed investment decisions.
- Financial Planning: Assists in planning your investments according to your financial goals.
How an RD Calculator Works
An RD calculator or RD return calculator is an online tool that allows you to calculate returns from your recurring deposit easily. It automatically performs calculations based on the inputs provided and shows you results instantly. To use an RD calculator online, you need to enter the following details:
- Monthly Investment: The amount of money you wish to invest monthly in the RD scheme. The amount remains fixed throughout the period of investment.
- Interest Rate: The rate of interest offered in the RD scheme.
- Time Period: The time period of investment or the maturity period of your RD.
Based on these inputs, the RD interest calculator will show you the following results:
- Total Investment Amount: The total amount invested by the end of the maturity period.
- Accrued Returns: The returns earned from your investment.
- Total Value: The total maturity amount, which is the sum of the total investment amount and the returns earned.
The formula to calculate RD is as follows:
A = P x (1 + r/100)^nt
Where,
- A = Total amount by the end of the period
- P = Principal amount from which compounding will start
- r = Annual rate of interest
- n = number of times the interest compounds in a year
- t = number of years
How to Use INDmoney's Recurring Deposit Calculator?
INDmoney offers a user-friendly RD interest calculator that comes with a simple yet highly functional interface. Follow these steps to calculate your RD returns instantly:
1. Open the INDmoney RD Calculator: Access the calculator on your browser.
2. Enter Monthly Investment: Input the amount you wish to invest monthly.
3. Enter Interest Rate: Provide the interest rate offered in the RD scheme.
4. Enter Investment Duration: Specify the time period of the investment.
5. Calculate: The calculator will instantly display the total returns and final maturity amount.
Example:
If you enter Rs 20,000 as the monthly investment, a 5% interest rate, and a 10-year time period, the calculator will show:
- Invested Amount: Rs 24,00,000
- Returns: Rs 7,15,083
- Maturity Amount: Rs 31,15,083
You can adjust the inputs to compare different combinations of monthly investments, interest rates, and time periods to see various results.
Frequently Asked Questions
What is an RD calculator?
An RD calculator is an online tool that helps you calculate the returns on your recurring deposit investments by inputting your monthly investment, interest rate, and investment duration.
How does an RD calculator work?
The RD calculator uses the compound interest formula to compute the total investment amount, accrued returns, and maturity value based on the details you provide.
Why should I use an RD calculator?
An RD calculator saves time, ensures accurate results, and helps you compare different RD plans to make informed investment decisions.
Can I compare different RD plans using the RD calculator?
Yes, you can compare different RD plans by adjusting the interest rate and investment duration to see how various options impact your returns.
Is the RD calculator free to use?
Yes, most online RD calculators, including the INDmoney RD calculator, are free to use and provide instant results.
How often should I use an RD calculator?
You should use an RD calculator whenever you are planning to start a new RD, renew an existing one, or compare different RD options to ensure you get the best returns.