Bank Rd Account Calculator
'/%3E%3Ccircle cx='48' cy='39' r='19' fill='%23f2c9a5'/%3E%3Cpath d='M27 35c3-16 39-17 42 2-8-8-27-9-42-2z' fill='%23374151'/%3E%3Cpath d='M21 86c5-24 49-28 56 0z' fill='%232563eb'/%3E%3Ccircle cx='41' cy='41' r='2' fill='%23111827'/%3E%3Ccircle cx='55' cy='41' r='2' fill='%23111827'/%3E%3Cpath d='M42 52c4 3 9 3 13 0' stroke='%2392400e' stroke-width='3' fill='none' stroke-linecap='round'/%3E%3C/svg%3E)
Reviewed by Calculator Editorial Team
A Recurring Deposit (RD) account is a savings product offered by banks where you deposit a fixed amount at regular intervals, typically monthly. The bank then credits the interest earned on the deposited amount to your account. This calculator helps you determine the maturity amount, total interest earned, and the growth of your RD account over time.
How to Use This Calculator
To calculate your RD account details, follow these steps:
- Enter the monthly deposit amount in your local currency.
- Specify the interest rate per annum offered by your bank.
- Select the RD tenure in years.
- Click the Calculate button to see your results.
The calculator will display the maturity amount, total interest earned, and a chart showing the growth of your deposits over time.
Formula Used
The maturity amount of an RD account can be calculated using the following formula:
Maturity Amount = P × [((1 + r/12)^n - 1) / (r/12)] × (1 + r/12)
Where:
- P = Monthly deposit amount
- r = Annual interest rate (in decimal)
- n = Total number of months (tenure × 12)
The total interest earned is calculated by subtracting the total deposits from the maturity amount.
Worked Example
Let's calculate the maturity amount for an RD account with the following details:
- Monthly deposit: $1,000
- Annual interest rate: 7%
- Tenure: 2 years (24 months)
Using the formula:
Maturity Amount = 1000 × [((1 + 0.07/12)^24 - 1) / (0.07/12)] × (1 + 0.07/12)
Maturity Amount ≈ $26,924.50
Total interest earned = Maturity Amount - (Monthly Deposit × Number of Months)
Total interest earned ≈ $26,924.50 - $24,000 = $2,924.50
Frequently Asked Questions
What is the difference between an RD account and a fixed deposit?
An RD account involves regular monthly deposits, while a fixed deposit is a one-time lump sum investment. RD accounts typically offer higher interest rates as they encourage regular savings.
Can I withdraw money from an RD account before maturity?
Most banks allow partial withdrawals, but premature withdrawals may result in lower interest rates or penalties. Check your bank's terms and conditions.
How is the interest calculated in an RD account?
The interest is calculated on the deposited amount plus any accumulated interest, typically on a monthly basis.