Recurring Deposit Calculator - India
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Recurring Deposit scheme is offered by almost all banks (RD schemes of SBI, PNB, ICICI Bank, HDFC Bank, IDBI Bank, Bank of India, Bank of Baroda, Corporation Bank ) in one form or the other. Recurring Deposit is very popular among the salaried class, specially who can afford to save only few hindered or say few thousand rupees per month. This scheme is a boon for people who do not have a large amount of savings and thus can not use the Fixed Deposit scheme of the banks. Under this scheme, the customer deposits a minimum amount (normally fixed) every month, and bank pays the interest at the pre-determined rates (which is usually the same as applicable to fixed deposits ). At the end of the period i.e. on maturity date, the customer is paid the maturity value i.e. principle deposited and the interest payable.
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Recurring Deposit Interest Calculator
The above is a RD Interest Calculator which calculates the maturity value (i.e. principal amount + interest earned ) of the deposits made under recurring deposit schemes of banks in India. The above calculator does not account for TDS as different banks will be using different periods for deduction of the TDS (see below that TDS has become applicable now on RD accounts).
TDS On Interest Earned on Recurring Deposits / TDS Rules for RD Interest :
Until May 2015, banks were not required to deduct TDS on the interest earned on RD accounts. However, wef 1st June, 2015, Tax Deduction at Source (TDS) is applicable on interest paid / accrued on RD accounts. In case the deposit holder does not want the Tax to be deducted at source, they are required to submit Form 15G / 15H (other than company, firm or co-operative society)/ Exemption Certificate under Section 197 (in case of all holders)/ or any other Tax Exemption Certificate with the Bank. Such form or tax exemption certificate has to be submitted every financial year for each recurring deposit held with the Bank. Thus, now the TDS rules for RD are similar to FD rules for TDS.
How Recurring Deposit Interest is calculated ? / Formula for RD Interest calculations :
Formula used by Banks in India / Recurring Deposit Calculations / RD Calculations / Recurring Deposit Calculation Formula / RD Formula used by Indian Banks : The following formula is used by Banks in India for calculation of maturity value of the Recurring Deposit wherein the compounding is done on a quarterly basis:
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In EXCEL ( .xls file ) the Future Value (FV) is used for this purpose. However, it has been noticed that it does not exactly match with the values as per the bank maturity value charts of banks in India.
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