# RD Calculator

₹500 ₹1,00,000
%
4% 8%
1 120

Amount Invested Vs Return

• Total Investment
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• Maturity Value
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Total Value

Interest Earned

###### Tip For You

Invest early. The longer your money has time to work for you, the more significant the effect of compounding can be. Compounding is known as the eighth wonder of the world!

## Introduction

Recurring deposit (RD) is an investment avenue offered by most banks and financial institutions in India. The term recurring means something that repeatedly occurs over a period of time. It is preferred by investors since it is one of the low-risk investment options that offers higher returns than a regular savings bank account. It also offers flexible tenure options. Recurring Deposit is somewhat like a Fixed Deposit, however, it offers higher flexibility. Therefore, by investing in an RD, investors can allocate their funds via instalments rather than depositing a lump sum amount in one go.

### What is fisdom RD calculator?

As there are many banks offering RDs, before narrowing down on one RD, it is important to know details such as instalment amount, interest rate, and deposit tenure to ensure better returns. fisdom’s RD calculator helps in calculating the returns that can be expected out of a RD investment on the basis of these factors.

It is an easy-to-use simple calculator with quarterly compounding of interest. There are 3 main fields to be filled for ascertaining potential earnings from a recurring deposit investment. These are:

1. Monthly investment – The amount to be deposited every month
2. Expected return – The approximate interest rate offered by a bank on RD
3. Duration – The tenure for which deposits are to be made

### How to use the fisdom RD calculator?

Here are the steps to use the RD calculator for estimating returns from an RD investment:

1. The first step is to enter the monthly investment amount in the first field of the calculator. This can be done either by typing the amount in the box next to the field or by adjusting the slider underneath.
2. Enter the expected return, which is the interest rate expected on the investment. As in the earlier step, you can either input this in the box or use the slider to adjust the expected return.
3. As the last step, you must provide the duration or deposit tenure in the box or through the slider.

Once you have input all the values as per the steps mentioned above, the two blue bars on the right-hand side of the tool will provide the total value invested and total maturity value. If you wish to see changes in returns based on changes in one of the factors, such as interest rate, deposit amount or tenure, you can do so by adjusting the corresponding sliders.

It is important to note that the returns calculated by the tool are based on interest being compounded quarterly.

### What are the benefits of using a RD calculator?

A recurring deposit is a continued investment. The returns on this investment can be difficult to track at times, since the calculations could be challenging due to the presence of many variables and interest being compounded quarterly. Here is how an investor can simplify RD return calculations using the RD calculator:

1. With an RD deposit calculator, there is no hassle of manually computing investment returns as investors can know the exact amount of returns that their deposits can accrue as per the investment period selected.
2. Using the RD calculator, investors can plan their finances with better clarity as it provides the exact amount of returns that an RD investment can accrue.
3. The calculator offers convenience of use and saves time, which can be used productively for other reasons.

As per new RBI regulations, RD investment returns are liable for TDS deduction. However, investors must make the TDS deduction calculations manually since the post tax return on RD depends upon your individual Income tax slab.

### How to calculate interest on RD investment?

Most banks offer interest on recurring deposits compounded quarterly. For this, banks make use of the following formula to determine the maturity value of RD:

M=R[(1+i)n – 1]/1-(1+i)(-1/3)

Here,

M=Maturity value of RDR=Monthly installment towards RDn=Number of quarters (investment tenure)i=Interest rate / 400

While this formula can be used for manual calculations or for better understanding of returns calculation for RD investment, it is primarily what goes into the back-end of automated online RD calculators.

### Who should invest in recurring deposits?

Recurring deposit investments are ideal for investors who want to invest small amounts of money in a phased manner. Investors looking for a low-risk avenue with higher returns can consider investing in RDs.

As far as eligibility of RDs is concerned, all Indian residents and Hindu Undivided Families (HUFs) are eligible to invest in these. Some banks may also permit minors to invest in RDs to encourage a savings habit at an early stage in life. Minors investing in RDs must have guardians to manage their finances.

### What is the tax applicability of recurring deposits earnings?

Returns on RD investments attract tax deducted at source, i.e. TDS, just like FD returns. Tax on RD returns is levied @ 10% p.a. if the deposit value is more than Rs. 40,000. Only the interest earnings on RD investments are taxable and not the full maturity value of investment. Investors who do not have any taxable income must submit Form 15G to the bank. This ensures that no TDS on recurring deposits is applicable to them. You are liable to pay interest at your slab rate on RD interest.

### Conclusion

RD investment is a good option for those who do not wish to invest a bulk amount in one go. With regular installments in RDs, investors can earn higher returns in the long run. By using fisdom’s RD calculator, investors can know the best combination of investment amount and tenure. This allows better financial planning, especially from a future perspective.

## FAQs

Which is better: RD or FD or SIP?
The interest amount to be earned at maturity on a Fixed Deposit is higher than that on RD. RD is low risk and requires small amounts of investment. SIP is slightly high on risk but requires a small portion of investment. SIP returns are not fixed and depend on stock market performance. Therefore, RD and FD are suited to low-risk investors requiring fixed returns, whereas SIPs are suited to investors who are willing to take on risk for better returns.
What are the disadvantages of Recurring Deposit?
RD investment cannot be withdrawn at any time and therefore restricts liquidity in the hands of investors. Investors cannot modify the monthly investment amount in RD. It also offers a comparatively lower interest rate than FD investments.
Can I withdraw RD anytime?
RD withdrawals cannot be made at any time and attract a certain penalty percentage on withdrawals.
Can we open RD for 6 months?
The minimum RD tenure is six months and can go up to 10 years.
How much should I invest in RD?
RD scheme can be started with a minimum amount as low as Rs. 1,000 per month. Different banks may have different minimum amount requirements on RD investments.