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Recurring Deposit (RD) Calculator
About Recurring Deposits
A Recurring Deposit (RD) is a special type of term deposit offered by banks that helps people with regular incomes to deposit a fixed amount every month into their RD account and earn interest at the rate applicable to fixed deposits.
RD Calculation Formula
Maturity Amount = P × (1 + r/n)^(nt) + P × [{(1 + r/n)^(nt) - 1} / (r/n)]
Where:
- P: Monthly deposit amount
- r: Annual interest rate (decimal)
- n: Number of times interest is compounded per year (typically 4 for RDs)
- t: Time in years
Key Features of RDs
- Fixed monthly deposits for a fixed tenure
- Interest is compounded quarterly in most banks
- Higher interest rates than regular savings accounts
- Premature withdrawal options available with penalty
- Low risk investment option
- Helps in building savings discipline