A Recurring Deposit calculator is a highly suggested tool to use if you are considering investing in a recurring deposit scheme. But before we get to the basics of the online tool, let’s understand what Recurring Deposit is in the first place.
What is Recurring Deposit?
Recurring deposits are a savings option that helps an individual to build future savings. With a recurring deposit saving account, you can choose to save a small amount of money on a regular basis. This can be done in a form of monthly deposits that earn an interest for a pre-decided period. Once the recurring deposit matures, the interest on it and the lump sum is paid back. It’s easy to calculate returns on Recurring Deposit as the interest rate is fixed throughout the tenure of a recurring deposit. It does not change unlike some investment products, making Recurring Deposit a very attractive scheme, especially when it comes to savings.
The interest rate on a recurring deposit differs from one bank to another as in the case of any other savings account. For the banks in India, the interest rate lies in the range of 3.5 per cent to 8.5 per cent for varying time periods. In case of senior citizens, the RD account interest rate is higher as compared to the regular RD account interest rates. A majority of banks offer an additional rate of 0.25 per cent to 0.75 per cent for the senior citizens. The interest rate on Recurring deposits is compounded on a quarterly basis and a recurring deposit calculator helps calculate returns. All individuals, government organizations, HUF, corporate, minors above the age of can open a recurring deposit account. Most banks also offer a flexi RD account, wherein an investor can invest a flexible amount of money in intervals depending on their convenience.
The financial quarters for a recurring deposit:
Quarter 1- From April to June
Quarter 2- From July to September
Quarter 3- From October to December
Quarter 4- From January to March
Now, that we understood what is RDhttp://what is RD let us understand the benefits of using it.
Advantages of Using a Recurring Deposits Calculator
A recurring deposit calculator helps calculate the returns on recurring deposit. Recurring deposits helps inculcate a habit of monthly savings and also maintain a certain level of financial discipline amongst investors. The minimum investment amount for a recurring deposit account is INR 100 and can differ from a bank to another. The minimum tenure is 6 months and can last up to 10 years. You can also choose to take loan against recurring deposits as well. Calculating the rate of interest from recurring deposits can be time taking and complicated. Therefore, a recurring deposit calculator is significant; it comes with following benefits:
Simple to Use
An RD calculator online is simple to use. All you have to do is insert the right values of a monthly deposit, the recurring deposit rate and the total number of years of investment. A recurring deposit calculator gives back the maturity amount with complete accuracy.
Using the RD calculator online can save the valuable time of an investor. It helps perform difficult calculations in a matter of seconds. It eliminates the trouble an investor must go through, given the lengthy calculations that have to be done.
The RD calculator online is highly accurate, wherein, the scope for manual errors is eliminated if the input is correct.
Planning for the Future
The recurring deposit calculator helps an investor to plan their future with high level of precision as the RD calculator online returns the exact value an investment shall reap. This exact amount is calculated because of the fixed RD returns that are unaffected by the market condition.
Comparison of Maturity Values
Financial institutions and banks offer recurring deposit scheme. Using the recurring deposit calculator, investors can make a comparison of the maturity values of recurring deposits in seconds.
Free of Cost
The recurring deposit calculator is free of cost. An investor can make unlimited use of it to calculate returns from RDs in various tenures and different interest rates.
On a Parting Note
By using the recurring deposit calculator, you can make your calculations effortless. Using the calculator is very easy and the results are also accurate. It helps save time by calculating the maturity amount from recurring deposits and can also use this for the comparison of multiple recurring deposits. By using the RD calculator online, investors can plan their finances with more clarity.
In case, you are also planning to diversify your portfolio to increase your savings, it’s suggested that you do so with caution. It’s important to know the SEBI guidelines of investing before you put your money in an investment option. It’s always about smart investing in the end.