Recurring deposits are investment instruments where monthly fixed deposits have to be made. RDs can be short, medium, or long term and they are highly liquid in nature. They help you save money for futuristic purposes and interest can be earned on these deposits. This inculcates a habit of investing regularly among individuals and a sense of discipline can also be maintained because of this.

This is a flexible scheme that helps save money as compared to FD schemes.

The rate of interest does not fluctuate and it is consistent and fixed throughout the entire tenure of the recurring deposit.

The interest is compounded quarterly and the rates may vary depending on the specific bank. For Indian banks, the rate of interest lies between 3.5% to 8.5% for different periods of time.

Many banks and financial institutions offer Recurring Deposits.

**What is an RD Calculator?**

A Recurring Deposits Calculator is highly beneficial when it comes to accurately find out the approximate RD returns for the average investor. Over the tenure of the RD, the quantum of interest can be gained and the maturity value can be easily calculated in an efficient, time-saving manner with this calculator.

**How is an RD Calculator helpful?**

- It may be difficult for investors to keep track of the returns on the deposits as the interest is compounded quarterly and many different factors are involved in the process of calculating these returns.
- It is highly convenient and gets the task done in a very short period of time which also shows how efficient and meticulous it is.
- An investor’s finances can be planned for the upcoming future or the long run as a proper idea on the amount that will be accrued by their investment will be provided.
- A RD calculator is beneficial in making the entire procedure simpler and hassle free for anybody to use and in the end, TDS deduction is the only part which has to be manually calculated.
- It is highly accurate and has proven to be mistake free which is another good reason to utilise this calculator when it comes to financial planning and managing your resources with it.

**How do RD Calculators work?**

In order to find out the RD maturity amount, there are a few variables that are to be considered,

The standard RD maturity formula that is taken is,

**A = P*(1+R/N)^(Nt)**

This equation has variables where,

Stands for the maturity amount

**P** is used to show the monthly RD installment

**R** denotes the rate of interest in percentage

**N** is the compounding frequency which is the number of quarters in the total period of time.

**t** is for tenure

In order to use the calculator directly without manually having to utilize the formula at all,

- Enter the monthly amount that is to be deposited in the RD.

- Input the rate of return which is expected and the number of years.

- The final value of the total investment after the required period of time will be displayed in a few seconds.

**For example, **

If the monthly investment is INR 10000 and the rate of interest is 6% per annum for a time period of two years, the total investment will be INR 2,40,000. The interest in full will be INR 15,511 and the maturity value sums up to INR 2,55,511.

**FAQs**

### Q1. Is the RD Calculator free for all to use?

Ans. Yes, the RD Calculator is completely free for everybody to utilize without any additional costs being incurred.

### Q2. On RD, is TDS applicable?

Ans. From June 1st, the Finance Bill 2015 stated that TDS is mandatory for all RDs. It is only applicable on the interest which is accrued on the RD.

### Q3. Can your RD prematurely be closed?

Ans. Your RD account can be closed or stopped before maturity. Until the date of closing, the interest will be paid and a penal fee may also be charged by the financial institution that you have deposited your money.

### Q4. Is there any minimum amount which is necessary to open a RD account?

Ans. Every financial institution has a different requirement. Normally, the amount may be as low as INR 500 and the same amount can be deposited on a monthly basis throughout the entire period. No maximum limit has been provided on the amount which can be deposited.

### Q5. Is the interest which is generated from RD taxable?

Ans. The interest that is generated from Recurring Deposits is taxable.

### Q6. What is the RD tenure range?

Ans. It typically starts from 6 months and can go up to 10 years. You can choose the time period in multiples of three months after the initial six months or nine months and so on.

### Q7. Is there a penalty levied if there is a delay in the deposit every month?

Ans. A penalty is to be paid in this situation but it is based on the bank and the period of the delay as the payment of the penalty varies from case to case.

### Q8. Do senior citizens get any additional benefits on RDs?

Ans. There is a higher rate of interest which is given. Normally, 0.25 to 0.75 percent more than the usual RD interest is offered.