look news india
New Delhi: Recurring Deposit (RD) is a safe investment option, where interest is now earned like a fixed income plan. In fact, the recurring deposit scheme for the September quarter has become more attractive than ever.
The government has increased the interest rate on this scheme from 6.2 percent per annum to 6.5 percent per annum. RD is also a financial investment option like FD, but here there is more convenience regarding investment.
In FD, you have to invest lump sum money in any scheme. In RD, you can invest in different installments on monthly basis like SIP. In this, interest is added to your account by compounding on quarterly basis.
Keep these things in mind-
On RD, Bayal joins according to compounding. This means that the longer the tenure, the benefits will increase accordingly. Therefore one should have a long term goal while doing RD. In this it is necessary to open an account with at least Rs 100. You can deposit any maximum amount every month.
how much will it cost
Any adult person can open a single account in RD. An individual can open any number of different RD accounts. 3 adults can also open a joint account.
Parents can open an account in the name of the minor. This scheme can be started in the name of a child above 10 years of age.
Maturity of 5 years, facility to extend up to 5 years-
The maturity period of RD account is 5 years, but it can be extended for another 5 years. For this, information will have to be given to the post office before maturity.
Premature closure of the account can be done after 3 years of account opening. But then you will get interest only as per the interest received on savings account.
How much will be the benefit of depositing Rs 5000 every month?
Monthly Deposit: Rs 5000
Duration: 10 years
Interest rate: 6.5 percent
Amount on maturity: Rs 8,44,940
Total investment: Rs 6,00,000
Profit: Rs 2,44,940
How is interest calculated?
There are different formulas for calculating interest on RD.
If you invest monthly…
m=r [(1+आई)एन – 1] divided by 1-(1+i)(-1/3)
M: Maturity value of RD
R: Number of monthly installments of RD
n: tenure (total number of quarters)
I: interest rate/400r
If you deposit a lump sum…
A=P(1+r/n)^nt
A: final amount
P: Total amount invested
R: interest rate
n: How many times the interest is compounded in a year
T: Total tenure of RD
(Apart from this, many banks or institutions also provide the facility of RD calculator. Using this you can know the estimated value of your investment.)