A Recurring Deposit is a continuous saving instrument. It is a versatile investment option for depositors and can be easily used as a safety net for emergencies. You can also use it to save up for buying a luxury item, going for a dream vacation, etc. RDs are offered by most financial institutions and banks in India. However, calculating the returns from it can be difficult for an average depositor. This is when an RD calculator is useful.
What is it?
An RD Calculator shows you the exact amount that you should set aside for the corpus you aim for. It acts as a guide and enables you to work with the resources that you have. Hence, you can deposit regularly while never worrying about running out of money at the end of every month.
Benefits of using the calculator
A Recurring Deposit Calculator lets you determine the maturity value at the end of the tenure of your investment. Moreover, using this tool can offer you the following benefits:
- It lets you plan your RD with greater clarity. This tool enables you to decide the exact amount that you should deposit regularly to reach your targeted corpus.
- The calculations are accurate. Hence, you can use it to determine the exact values and save a lot of time and trouble.
- It takes only a few seconds to compute the results. Hence, they are convenient and time efficient.
- If you are unsure of the variables, you can enter numerous combinations on the calculator to determine the exact values you will need to reach your target amount.
- It is free and you can use it as many times as you want.
How to use it?
Today, opening an RD and depositing money regularly is easy. You can simply download the Banking app on your phone and use it to open an RD from anywhere, anytime. Moreover, you can select your deposit amount and interval, and the amount will automatically get deposited at your chosen interval.
However, if you are unsure about the maturity value, the tenure, or the deposit that you should make, use an RD Calculator, and arrive at the values using the following steps:
- Open the calculator and fill in the deposit amount in the accurate box.
- Next, type in the tenure and the interest rates corresponding to the tenure.
- Calculate and the results will be displayed in seconds.
You can play around with the inputs and find your preferred values before opening an RD online.
Are there any precautions?
While an RD Calculator saves you the trouble of computing the returns manually, it might not consider any TDS deductions. Hence, you should be mindful of the deductions when analysing the maturity value.