# RD Calculator

## What is RD?

Recurring Deposits (RD) are a way to save money regularly. You deposit a fixed amount every month for a set period, and at the end, you get back your savings along with some interest. It's a simple and disciplined way to grow your savings over time.

## What is RD calculator?

RD (Recurring Deposit) calculator is a simple online tool designed to help you estimate the maturity amount of your recurring deposit investment. It takes into account factors such as the monthly deposit amount, tenure (how long you plan to save), and the interest rate offered by the bank. With this information, the calculator provides an approximation of the total amount you'll receive at the end of the investment period, including both your principal amount and the interest earned.

## Advantages of Using an RD Calculator:

### The RD calculator provides various benefits:

• Efficient Financial Planning: RD calculator is a valuable tool for simplified financial planning. Whether you're saving for a car or your child's education, the calculator helps you systematically plan and determine the required monthly contributions to achieve your financial goals.
• Time-Saving: It instantly calculates maturity and returns, saving time compared to manual calculations.
• Accuracy in Results: Manual calculations may have errors, leading to misguided decisions. The RD calculator, an online tool, provides accurate results from your inputs, minimizing miscalculation risks.
• Cost-Free and Unlimited: Free to use, allowing unlimited comparisons of RD offerings from different banks.

## ‍How is RD interest calculated?

The interest on a Recurring Deposit (RD) is typically calculated using the formula for compound interest. The formula is:

A = P*(1+r/n)^(nt)

Where:

A = Maturity amount (the total amount you'll receive at the end).

P = Monthly deposit amount.

r = Rate of interest per compounding period.

n = Number of compounding periods per year.

t = Tenure of the RD in years.

Suppose you invest in a Recurring Deposit with the following details:

P= 5,000 Annual interest rate

r= 6% Compounding frequency

n= 12 times a year (monthly compounding)

t= 2 years

A = P*(1+r/n)^(nt)

Calculate the monthly interest rate (r/n):

r/n = 0.06/12= 0.005

Calculate the compounding factor:

(1+R/N)^(Nt) = 1.1236

Calculate the maturity amount for one instalment:

5,000×1.1236 = 5,618

Total number of months (nt) to get the total maturity amount:

5,618×24 = 1, 34,832

So, at the end of 2 years, with a monthly deposit of ₹5,000 and a 6% annual interest rate compounded monthly, you would receive approximately ₹1, 34,832, including both your principal and the interest earned.

### FAQs

What is a Recurring Deposit Calculator?
Can I withdraw my RD amount prematurely?
Is TDS applicable on RD?