Recurring deposits (RDs) are an investment instrument almost similar to fixed deposits. However, you have to make fixed monthly deposits in RDs, unlike a lump sum amount in FDs. RDs create a habit of regular investment among earning individuals. These also instil discipline when it comes to savings. Recurring deposits are offered by the majority of banks and financial institutions.

RD returns calculation can be quite complicated for an average investor to figure out accurately every time. This is where an RD calculator can prove to be immensely beneficial.

A recurring deposit, as the name suggests, is a continuing investment. The returns on these deposits can be challenging to track for investors. The interest is compounded quarterly, and there are several variables involved, which makes the calculations multipart.

An RD deposit calculator eliminates the hassle of computing its returns manually and enables an investor to know the exact amount their deposits will accrue after the relevant period.

The only consideration that the investor has to do manually is the TDS deduction. As per new RBI norms, RDs are also liable for TDS deduction; however, there is no uniformity in its implementation across financial institutions, which is why RD calculators don’t take it into account.

Apart from that small caveat, an RD amount calculator offers an investor with the following advantages:

• The calculator enables investors to plan their future finances with greater clarity by providing them with the exact amount their investment will accrue.
• It’s convenient to use and saves a lot of time for the investors, which they can otherwise use productively.
• The accuracy of these calculators can never be in question. Accurate estimates are pivotal for prudent financial planning.

There are three variables that go into the calculation of the RD maturity amount. An RD account calculator assigns these variables to a standard formula to arrive at the exact maturity amount. 

The formula for RD maturity is as follows:

A = P*(1+R/N)^(Nt)

This is the standard formula used in the calculation of the RD maturity amount, regardless of the sum invested or tenure. All you need to do is put in the variables.

For example, an individual starts an RD account for an investment of Rs. 5000 per month for a tenure of 1 year, i.e. 4 quarters. The interest accrued on this account is 8%. The final maturity amount on this particular deposit is calculated with the following formula-

A = P*(1+R/N)^(Nt)
= 5000*(1+.0825/4)^(4*12/12) = 5425.44
= 5000*(1+.0825/4)^(4*11/12) = 5388.64
…
= 5000*(1+.0825/4)^(4*1/12) = 5034.14
By taking the sum of series, total maturity value, i.e. A = Rs 62,730.85

Solving this equation manually is no mean task. A recurring deposit calculator, on the other hand, will provide you with the exact number in mere seconds.

The maturity value for the depositor on the investment in RD is INR Rs 62,730.85

The RD calculator available at the Sensex India website is straightforward to use and does not require any subject expertise. Here is a step-by-step guide for using this calculator.

Step 1: Input the monthly amount you would be putting in the recurring deposit

Step 2: Enter the number of years and the expected rate of return.

The total value of the investment after the tenure will be expressed within seconds.

Using Sensex India’s online RD calculator, India comes with its fair share of advantages. Depositors can use this calculator and avail the following benefits:

• It is a time-saving instrument. It performs the calculations in seconds, and the entire procedure starting with visiting their website takes no more than 1-2 minutes.
• It is always accurate. There is no chance of any mistakes or ambiguity if you input every variable correctly.
• This RD amount calculator is free to use as many times as a depositor wishes. You can input one or more of the variables in as many variations you want.

Recurring deposit is considered a stable financial investment with potentially high returns. You may compare the performances of several other investment schemes for the same amount using online calculators available and make a decision accordingly.

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