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Posted by Jane Maria on June 2, 2024 at 8:04am 0 Comments 0 Likes
Recurring deposit schemes provided by banks are favourite investment choices for many people. Working people, as well as people with smaller incomes, choose RDs as their investment option. Under this scheme, a person must invest a specified sum of money for a fixed period each month and receive interest on their investment. Upon maturity of the RD, the principal sum is returned along with interest.
RD schemes are usually more flexible than FD schemes, which often benefit those who choose to set up an account to save money and build an emergency fund.
How is interest determined for recurring deposits?
To learn more about your investment, use the recurring deposit calculator
For most banks, interest for RD is calculated annually. The formula is:
M = R[(1+i)^n-1]/(1-(1+i)^(-1/3) )
In this,
M is the Maturity value
R is Monthly Instalment
N is the Number of quarters
I is Rate of interest/400
Following are the details about RD:
To help plan your monthly investment in a recurring deposit, it is advisable to use an RD calculator to plan your investments.
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