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Recurring deposit: 16.26 lakhs will be available on 12 lakh investment, how interest gets added to your account

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Interest Rate on RD: Recurring deposit (RD) is a safe investment option. RD not only gets more interest than savings account but also from many fixed income schemes.

Interest Rate on RD: Recurring deposit (RD) is a safe investment option. RD not only gets more interest than savings account but also from many fixed income schemes. Since this scheme is not market linked, it is considered to give guaranteed returns in terms of investors. RD account can be opened in any post office, government or private bank and financial institution. The post office is getting interest on RD at 5.8 per cent per annum. At the same time, interest is getting between 5.5 and 6 percent in different banks.

RD is also a financial investment option just like FD, but there is more ease of investment here. In FD, where you have to invest a lump sum in any scheme. In RD, you can invest on monthly basis in different installations like SIP. In this, interest is compounded on a quarterly basis in your account.




How much profit is there on the monthly 10,000 rupees

At the post office, the interest on RD is 5.8% per annum (quarterly compounding). If you deposit Rs 10,000 in RD every month, then it will be Rs 1,20,000 annually. RD can be done from 5 years to 10 years. If you continue investing for 10 years, then your total investment will be 12 lakh rupees. At the same time, your total amount on maturity will be 16,26,476. That is, you will get interest of Rs 4,26,476.

How is calculate

There are different formulas for calculating interest on RD.

If you invest monthly….

M = R [(1+i)n – 1] divided by 1-(1+i)(-1/3)

M: RD’s Maturity Value

R: Number of Monthly Installations of RD

N: Tenure (Total Quarter Number)

I: Interest rate / 400

If you deposit a lump sum….

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

A: Final amount

P: How much did the total investment

R: Rate of interest

N: How many times interest is compounded in a year

T: Total Tenure of RD

(Note: Apart from this, many banks or institutions also provide RD calculator. Using this, you can know the approximate value of your investment.)

RD accounts come with 2 types of schemes.

1. Regular Recurring Deposit

In this, you have to fix a period and an amount. Suppose you decided that you will deposit 6 thousand rupees in your RD account every month for the next 10 years. Once you decide everything, you will have to deposit only 6 thousand rupees every month for 10 years. You can never change the amount deposited in a normal RD account. If you deposit less money, then you will face penalty.

2. Flexi Recurring Deposit

In this, you will have to decide the time, but you can increase or decrease the amount deposited in it. Suppose you set a target of depositing 6 thousand rupees a month for 10 years, but if there is a problem in the middle, you can reduce it. Or you can increase the income if you increase it. The interest rate on a normal RD account is slightly higher than a Flexi RD account.

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