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RD Calculator

# How to Maximise Earnings With RD Calculator?

## What is RD?

Recurring Deposits (RD) are investment tools that allow individuals to save money for the long term by making regular monthly payments. You Can Maximise Earnings With RD Calculator. With RD, investors have the flexibility to choose the deposit tenure and the minimum monthly payment according to their convenience. RD schemes are often preferred by individuals who want to build a savings account for emergencies or future expenses.

## How is RD interest calculated?

Interest on RD is usually compounded quarterly in most banks. The formula for calculating RD interest is as follows:

M = R[(1+i)^n-1]/(1-(1+i)^(-1/3))

In this formula:

M represents the maturity value

R denotes the monthly instalment

n indicates the number of quarters represents the rate of interest divided by 400

For example, if you invest ₹ 5,000 per month for one year at an interest rate of 8%, your total value will be calculated as follows:

R = 5000 n = 4 (one year has four quarters) i = 8.00/400

M = ₹ 62,647 in one year

## Benefits of RD

• RD can be used as collateral for taking loans, with the possibility of obtaining up to 80-90% of the RD amount as a loan.
• Premature withdrawals are allowed under RD, although a small penalty may be applicable.
• RD schemes often offer a higher rate of interest (usually 0.5% more) for senior citizens.
• Minors can also open RD accounts under the supervision and guardianship of their parents.
• The tenure of RD schemes is flexible, ranging from 7 days to 10 years, allowing individuals to choose according to their convenience.
• RD schemes enable regular saving, with the minimum deposit amount sometimes as low as ₹ 10.

## Tax Benefits on RD

Similar to other tax-saving and investment instruments, Recurring Deposit schemes are subject to taxes. A TDS (Tax Deducted at Source) of 10% is deducted on the returns accrued from RD if the total interest exceeds ₹ 10,000 in a single financial year.

## Comparison with SIP

When compared to Systematic Investment Plan (SIP), RD has certain differences. SIPs, particularly those investing in Equity Linked Mutual Funds (ELSS), are more beneficial for the long term. Long-term gains from equity investments are tax-free, making SIPs in ELSS tax-free after one year.

If you’re looking to maximize your earnings through Vakilsearch’s RD Calculator, here is a step-by-step guide to help you out:

Step 1: Go to Vakilsearch’s Website

The first step is to go to Vakilsearch’s website and navigate to the RD Calculator section. You can find the RD calculator under the Financial Services section.

“Use our Recurring Deposit Calculator for precise results. Try our RD Calculator Online Free today!

Step 2: Enter Your Investment Details

Once you’ve located the RD Calculator, you’ll need to enter your investment details, including the amount you want to invest, the tenure of the investment, and the rate of interest offered by the bank or financial institution. Make sure to enter accurate and up-to-date information to get the most accurate results.

Step 3: Click on Calculate

After you’ve entered all the necessary details, click on the “Calculate” button. The calculator will then display the maturity amount you can expect to earn at the end of your investment tenure.

Step 4: Compare RD Plans from Different Financial Institutions

You can also use the Vakilsearch RD Calculator to compare RD plans from different banks and financial institutions. To do this, enter the investment details for each plan you want to compare and click on “Calculate”. You can then compare the maturity amounts to determine which plan offers the highest returns.

Step 5: Invest in the Best Plan

After comparing the different RD plans, you can choose the one that offers the highest returns and invest your money accordingly. Remember to read the terms and conditions carefully and to consult with a financial advisor if you have any doubts or questions.

In conclusion, using Vakilsearch RD Calculator is a great way to maximize your earnings and make informed investment decisions. By following this step-by-step guide, you can easily use the calculator to compare different RD plans and choose the one that offers the best returns for your investment.

### FAQs

#### How is RD better than FD?

RD (Recurring Deposit) offers more flexibility in terms of monthly investments and is suitable for individuals who want to save regularly, while FD (Fixed Deposit) requires a lump sum investment and is suitable for those who have a large sum of money to invest.

#### What is the maturity amount in RD?

The maturity amount in RD depends on factors such as the monthly instalment, the rate of interest, and the duration of the deposit. It can be calculated using the RD interest formula.

#### Which RD rate is best?

The best RD rate depends on the current market conditions and varies across different banks and financial institutions. It is advisable to compare rates offered by various banks before making a decision.