1. What is RD Calculator?

The RD (Recurring Deposit) Calculator helps estimate the maturity value of your recurring deposit investments with banks like ICICI and HDFC. It calculates the total amount you'll receive at the end of your investment period.

2. How Does the Calculator Work?

The calculator uses the RD maturity formula:

Where:

• \( P \) — Monthly deposit amount (INR)
• \( r \) — Annual interest rate (in decimal form)
• \( n \) — Compounding frequency per year
• \( t \) — Time period in years

Explanation: The formula calculates the future value of a series of equal monthly deposits with compound interest.

3. Importance of RD Calculation

Details: Calculating RD maturity helps in financial planning, comparing investment options, and setting realistic savings goals for future expenses.

4. Using the Calculator

Tips: Enter monthly deposit in INR, annual interest rate as a decimal (e.g., 0.075 for 7.5%), compounding frequency (typically 4 for quarterly), and time period in years. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical compounding frequency for RDs?
A: Most banks compound interest quarterly (n=4), but it's best to check with your specific bank.

Q2: How is RD different from FD?
A: RD involves regular monthly deposits, while FD requires a lump sum investment upfront.

Q3: Are RD returns taxable?
A: Yes, interest earned on RDs is taxable as per your income tax slab in India.

Q4: Can I withdraw my RD prematurely?
A: Most banks allow premature withdrawal but may charge a penalty or offer reduced interest rates.

Q5: Which offers better returns - RD or SIP?
A: SIPs in mutual funds have potential for higher returns but also carry market risk, while RDs offer guaranteed but typically lower returns.