Calculate Interest on Recurring Deposit : Recurring Deposit (RD) is a safe and popular investment option in India, especially in small cities, towns and villages. Different banks offer the facility of Recurring Deposit at different interest rates. In this scheme, returns are given according to the pre-determined interest. This scheme is considered to give guaranteed returns for investors as it is not market linked. Now the interest received on RD is almost the same as the business of FD. However, in some ways it also proves to be better than Fixed Deposit.
Like FD, RD is also a safe investment option, but here investment is more convenient than FD. While in FD you have to invest a lump sum amount in any scheme, in RD you can invest in different installments on monthly basis like SIP. In this, interest gets added to your account by compounding on quarterly basis.
SIP Pause: SIP will not stop even if there is a shortage of money, the pause facility will help you reach your goal
benefit of compounding
Interest on RD is added on the basis of compounding. This means that the longer the tenure, the more the benefit will increase. Therefore, while doing RD, one should keep a long term goal.
Best RD Rates : Banks, Interest% (General) / Interest% (Senior Citizen)
SBI : 7% / 7.50%
HDFC Bank : 7.25% / 7.75%
ICICI Bank : 7.20% / 7.75%
Kotak Bank : 7.40% / 7.90%
Axis Bank : 7.20% / 7.85%
Bank of Baroda : 7.25% / 7.75%
PNB : 7.25% / 7.75%
IDBI Bank : 7.00% / 7.50%
Canara Bank : 7.25% / 7.75%
Indian Bank : 7.25% / 7.75%
Union Bank : 6.50% / 7.00%
Yes Bank: 7.75% / 8.25%
Bandhan Bank : 7.85% / 8.35%
Federal Bank : 7.50% / 8.00%
IndusInd Bank : 7.75% / 8.25%
Karnataka Bank : 7.40% / 7.90%
Post Office RD : 6.50%
South Indian Bank : 7.40% / 7.90%
(Source: bankbazaar.com)
Mutual fund industry grew 5.5 times in 10 years of Modi, top equity schemes gave up to 1063% return, 1 lakh became 11 lakh
How is interest calculated on RD
There are different formulas to calculate interest on RD.
Case 1 : If you invest monthly
M = R <(1+i)n – 1> divided by 1-(1+i)(-1/3)
M: Maturity value of RD
R: Number of monthly installments of RD
n: Tenure (total number of quarters)
I: Rate of interest/400
Case 2 : If you deposit a lump sum amount
A=P(1+r/n)^n
A: Final amount
P: How much did you invest in total?
r: interest rate
n: Number of times the interest is compounded in a year
t: Total tenure of the RD
Return Machine: 5 powerful schemes of SBI MF, up to 1014% return in 10 years, 1 lakh becomes 11 lakh
How much profit in 10 years at 8% interest
Monthly investment: Rs 10,000
Interest rate: 8 percent
Tenure : 10 years
Total Investment: Rs 12,00,000
Fund on maturity: Rs 18,36,168
Interest benefit: Rs 6,36,168
Fixed Income Fund: Is the income fixed in these schemes? Invest money after checking the profit and risk
How much profit in 5 years at 8% interest
Monthly investment: Rs 10,000
Interest rate: 8 percent
Duration : 5 years
Total Investment: Rs 6,00,000
Fund on maturity: Rs 7,38,619
Interest benefit: Rs 1,38,619