The calculator uses standard mathematical compounding formulas matching Indian banking and investment regulations.
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Yes. All interest and return rate inputs support up to two decimal places (e.g. 8.55%).
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Inflation reduces the purchasing power of your money. A 6% inflation rate doubles your cost of living every 12 years, requiring a larger retirement corpus.
A method where interest is computed only on the outstanding principal balance. As you pay down principal, interest outgo falls.
Flat rates calculate interest on the initial principal for the entire tenure, making them much more expensive than reducing-balance loans.
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A Recurring Deposit (RD) allows you to deposit a fixed amount of money every month for a pre-defined period. It helps salaried individuals build a habit of saving while earning interest rates equivalent to Fixed Deposits.
How is RD Interest Calculated?
The interest on an RD is compounded quarterly. Since you deposit money every month, the interest is calculated differently for each monthly installment based on how long it remains in the bank. The formula is:
M = R × [((1+i)n - 1) / (1-(1+i)-1/3)]
Where:
M = Maturity value
R = Monthly deposit amount
n = Number of quarters
i = Interest rate per quarter (Annual Rate / 400)
Frequently Asked Questions (FAQs)
Is TDS deducted on RD interest?
Yes, if the interest earned across all RDs and FDs in a bank exceeds ₹40,000 (or ₹50,000 for senior citizens) in a financial year, the bank will deduct TDS at 10%. You can submit Form 15G or 15H if your total income is below the taxable limit.
Can I change my monthly RD amount?
No, the monthly installment amount in a standard RD is fixed at the time of account opening. However, some banks offer "Flexi RD" schemes where you can vary your deposit amount.