# RD Calculator Tricks Every Person Should Know

Berry Mathew

Updated on:

Maintaining your finances while investing regularly can be tricky unless done right. And to do so, you need to be enlightened about all the ideal investment opportunities. One of those is a recurring deposit account. It helps you in sustaining funds while investing a small amount routinely.

To understand how to benefit from a recurring deposit or RD, you first must get your hands on the RD calculator. Investing and managing your finances will become easier once you understand how to work with an RD calculator. Keep reading to find out RD calculator tricks every person should know.

Contents

## What Is An RD Calculator?

RD calculator is an investment instrument that calculates the returns on deposits. The interest is compounded quarterly, making RD interest calculations a bit complicated. But this tool can make it easy.

The RD calculator calculates the investment’s maturity value based on a formula.

Formula to calculate recurring deposits maturity –

A = P*(1+R/N)^(Nt)

‘A’ – maturity amount

‘P’ – recurring deposits monthly instalment

‘N’ – compounding variable for interest rate

‘R’ – interest rate of recurring deposits in percentage

‘t’ – tenure of investment

## How To Use An RD Calculator Efficiently

Here are some tips for using an RD Calculator efficiently.

Know your Financial Objective: The function of an RD calculator is to save the hassle of manually calculating the premium rates for your RD account. Understanding your financial objectives will ensure you save time and effort while simultaneously making smart investments. For example, you can use an RD calculator to know your account’s interest rate and maturity value and make better investments.

Select the Right Tenure: The tenure of recurring deposit accounts differ from one provider to another. For example, banks, insurance companies, or NBFCs offer different tenures for RD accounts. Knowing the minimum and maximum tenure of the RD account being offered by the provider is crucial. Knowing the tenure will help you make better and more accurate calculations regarding interest rate and maturity value.

Check if the Maturity Value is Sufficient: The maturity value of an RD account is measured differently than an FD account. The interest on the RD account is calculated quarterly. The maturity value comprises the initial amount and the interest amount accumulated. Ensure that the maturity value estimated by the calculator meets your financial objectives and is enough to meet your financial and investment goals.

Consider the Interest Rate: The interest rate on an RD account differs from person to person and bank to bank. Usually, the interest rate offered to younger adults is lower than that offered to older adults (senior citizens). Therefore it is advised to primarily check for the interest rate offered before using an RD calculator.

Tax Deducted at Source (TDS): It might disappoint you, but unfortunately, the RD calculator does not account for TDS. Tax is not exempted from recurring deposits. Tax is deducted from your RD account if the maturity value exceeds Rs.40,000. So, while using the RD calculator, be aware of the tax deduction from the maturity value.

Avoid Errors: Calculations can get messy if the data filled isn’t correct. It will save you time and effort to cross-check your information on an RD calculator before checking for the values. Avoid such errors while using an RD calculator and get accurate results.

If you are considering a loan to invest in a recurring deposit, ensure that your CIBIL score is high enough to secure your loan. You can check your CIBIL report to determine your CIBIL report.

## How To Check Your Cibil Report?

Step 1: Google the official website of CIBIL.

Step 2: Click on “GET FREE CIBIL SCORE AND REPORT”

Step 3: Create your account by entering your personal information such as email ID, create a new password, enter your full name, select ID type and enter the number, and fill in your pin code and mobile number.

Step 4: Click on “Accept & Continue”

Step 5: You will receive OTP on your registered mobile number. Enter the OTP and click “Continue.”

Step 6: A screen reading “You have successfully enrolled!” will be displayed. Click on “Go to Dashboard. You will see your CIBIL report.

Step 7: “myscore.cibil.com” will open on a new tab.

Step 8: Click “Member Login”, fill in the details, and your Cibil report will be displayed on the screen.

Now that you know how an RD calculator works in calculating returns on deposits, be sure to use it and make the best investment decision today!