# IOB RD Calculator

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## why invest with Stack

###### Up to 12% returns p.a

Earn returns of up to 12% p.a with high-yeild bonds, high-interest corporate FDs and high-quality NCD options.

###### Passive income

Earn a steady passive income with fixed-income instruments with monthly, quarterly or yearly repayments.

###### Avoid market volaitlity

Bonds, NCDs and FDs have low correlation to the stock market. Even during market downturns you can earn steady returns.

###### Beat inflation

By investing in Safe Haven assets, you have a better chance of beating inflation by earning steady returns even during market downturns.

### What is IOB Recurring Deposit (RD) calculator?

The IOB Recurring Deposit (RD) calculator is a valuable tool for investors looking to systematically save money for the long term. It operates based on regular monthly payments and allows users to choose the deposit tenure and monthly contribution according to their preferences.

Recurring deposits are financial services provided by many banks, enabling individuals to make consistent deposits and earn returns on their investments. The interest rates for RDs are calculated on a quarterly compounded basis, similar to those offered for fixed deposits. The IOB RD calculator facilitates investors in estimating the potential returns and planning their savings effectively.

### How Does The IOB RD Calculator Work?

The interest on Recurring Deposits (RDs) is determined by banks and varies with the investment tenure. RD interest is compounded quarterly after an initial period of earning simple interest.

For example, if an investor starts an RD in June, they earn simple interest until September, after which interest is compounded quarterly. The quarters for RD investments are April to June, July to September, October to December, and January to March.

The formula for calculating Post Office RD interest and maturity value is:

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

Where, M = Maturity value

R = Monthly Instalment

N = Number of Quarters (tenure)

i = Rate of interest

For instance, if you deposit Rs. 10,000 monthly for 5 years at a 5.8% interest rate

M = 10000[(1+5.8)5 – 1]/1-(1+5.8)(-1/3)

This results in a maturity amount of Rs. 6,96,967, indicating an interest of Rs. 96,967 on the total deposit of Rs. 6,00,000.

### How To Use The IOB RD Calculator?

Using an RD calculator involves a straightforward process:

• Enter Investment Amount: Input the monthly amount you plan to invest in the recurring deposit.
• Specify Tenure: Indicate the duration or tenure for which you plan to maintain the recurring deposit.
• Provide Interest Rate: Enter the applicable interest rate offered by the bank for the recurring deposit.
• After entering these details, the RD calculator will swiftly compute and display the maturity amount along with the interest earned during the investment period
• ### Benefits Of IOB RD Calculator

Using an IOB RD calculator offers several benefits:

• Ease of Use: The IOB RD calculator is user-friendly. Simply input the monthly investment amount, tenure, and interest rate to get instant results.
• Accuracy: The calculator ensures accurate results, eliminating the possibility of errors in manual calculations.
• Time-Saving: Complex calculations that would take time and effort can be quickly performed by the calculator, saving valuable time.
• Financial Planning: The calculator helps individuals visualize the potential returns on their investments, aiding in effective financial planning.
• By leveraging the IOB RD calculator, investors can make informed decisions, plan their savings, and gain insights into the future value of their recurring deposits.
• ### Is RD better than an FD?

Fixed Deposits (FD) and Recurring Deposits (RD) are both popular investment options, each serving different financial needs. Here's a brief comparison:

Fixed Deposit (FD):

• Lump Sum Investment: FD requires a one-time lump sum investment.
• Flexible Tenure: You can choose the tenure of the FD, ranging from a few months to several years.
• Higher Interest Rates: Generally, FDs offer higher interest rates compared to RDs.
• Interest Payouts: Interest can be paid out at regular intervals or reinvested.
• Premature Withdrawal: Premature withdrawal may attract a penalty.

• Recurring Deposit (RD):

• Regular Monthly Investments: RD involves making regular monthly contributions, making it suitable for systematic saving.
• Fixed Tenure: RD usually has a fixed tenure, and the monthly contribution remains constant.
• Interest Rates: Interest rates are slightly lower compared to FDs.
• Maturity Amount: The maturity amount includes both principal and interest earned.
• Premature Closure: Premature closure may lead to a reduced interest rate.

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