BOI RD Calculator - Bank of India Recurring Deposit Calculator
The BOI RD calculator is a user-friendly, online tool that helps estimate the returns from an RD investment. It calculates the maturity amount and interest earned from Bank of India recurring deposit investment. This article covers Bank of India RD calculator and RD interest calculation in detail.
Recurring Deposit Calculator
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What is a BOI RD Calculator?
Bank of India's recurring deposit calculator is an online tool that helps estimate the interest earned by investing in a recurring deposit. For recurring deposits, the maturity amount is the total of all monthly instalments and the interest earned during the investment tenure. Also, for recurring deposits interest compounding is on a quarterly basis.
BOI offers multiple schemes to suit a wide range of customers. One can choose a scheme with tenure ranging between six months to 120 months. The minimum deposit amount for BOI RD is INR 50o per month.
The Bank of India recurring deposit calculator determines the interest and also the value of the investment at a future date. The BOI RD calculator is a simple tool. It works on the following inputs:
- Monthly deposit amount: Monthly amount that one deposits in a recurring deposit account.
- Interest rate: The income that the BOI recurring deposit investment earns. BOI determines the recurring deposit interest rates. The interest rates of recurring deposits vary from bank to bank and are available online.
- RD term: It is the tenure of the recurring deposit scheme (in years).
On entering the above details in the BOI RD calculator, the following results are generated:
- Total investment: Sum of all monthly deposits in the RD scheme.
- Wealth Gained: Interest income on recurring deposit scheme.
- Total Corpus created: Sum of all monthly instalments and the wealth gained. In other words, it is the maturity amount that the investor receives at the end of their investment tenure.
How to use a BOI RD Calculator?
One can use the Bank of India recurring deposit calculator online for free. The calculator is as easy to use the tool. It requires one to enter certain details such as monthly deposit amount and BOI recurring deposit rate. The calculator then automatically computes the wealth created from an investment. Furthermore, the calculator works on the future value formula to estimate the maturity value of the investment. The following example helps in understanding the BOI RD calculator better.
Mr Suraj plans to invest INR 50,000 per month in a recurring deposit scheme for seven years. The BOI recurring deposit rate is 6.50%. The maturity value of the investment for Mr Suraj using the BOI RD calculator is:
The following are the BOI recurring deposit Calculator inputs:
- Monthly investment amount: INR 50,000
- BOI RD Interest Rate: 6.50%
- RD Term: 7 years
On entering the above inputs, the calculator displays the following:
- Total Investment: INR 42,00,000
- Wealth Gained: INR 11,22,349
- Total Corpus Created: INR: 53,22,349
INR 42,00,000's investment at 6.50% interest per annum would be INR 53,22,349 in seven years. The interest income for Mr Suraj will be INR 11,22,349.
Benefits of using a BOI Recurring Deposit Calculator
The following are some of the benefits of using the BOI recurring deposit calculator:
- Simple and easy to use: The BOI recurring deposit calculator is easy to use. One has to simply enter some inputs to calculate their return.
- Saves time: The calculator calculates the results within seconds. Also, it saves time from performing complex calculations.
- Accurate results: The calculator gives accurate results, and also the chance for error is zero.
- Comparison: One can use the calculator to compare different recurring deposits RD. The comparison helps in choosing the right scheme that benefits them the most.
- Future planning: One can effectively do their investment planning by analysing the outputs from the calculator. The BOI recurring deposit calculator estimates future returns from an investment. Also, estimating the potential returns helps in proper investment and financial goal planning.
- Free to use: The calculator is available online. Individuals can use multiple times to compare returns from various recurring deposit investments.
How is interest and maturity amount on Bank of India RD calculated?
Bank of India decides the recurring deposit rate under the purview of RBI guidelines. The bank of India RD interest rate ranges between 6%-7%. The interest on RDs is compounded at the end of every quarter. Therefore, if an investor invests in between the quarter, the investor will earn simple interest until the end of the quarter. And once the quarter ends, the interest will earn interest. For example, suppose an investor invests in an RD in the month of November. In that case, the RD will earn simple interest for the month of November and December. And at the end of December, the interest will be compounded. RBI has defined quarters for RD investment, and they are April-June, July-September, October-December, and January-March.
The formula for recurring deposit interest rate and maturity value
Using the following formula, one can calculate the maturity amount and interest earned from a Bank of India RD.
Where M is the maturity value
R is the amount the investor wants to invest every month.
n is the investment horizon in quarters. For RDs, the tenure is in quarters.
i = interest rate/400. Bank of India sets the interest rate of BOI RD under RBI guidelines.
Mr Suresh wants to invest INR 10,000 per month in an RD scheme for a tenure of 8 years or 96 months. The interest rate offered by the scheme is 6.3%. Mr Suresh can calculate the interest and maturity amount using the following formula.
M = 10000*[(1+6.3/400)^(96-1)](1-(1+6.3/400)^(-1/3))
M = 12,48,841
For a total investment of INR 9,60,000, Mr Suresh earned, and interest of INR 2,88,841, and the maturity value is INR 12,48,841.
Current BOI RD interest rates
|Tenure||General RD Interest Rates||Senior Citizen RD Interest Rates|
|180 days to 364 days||6.25%||6.75%|
|1 year to 2 years||6.65%||7.15%|
|2 years to 3 years||6.70%||7.20%|
|3 years to 7 years 364 days||6.50%||7.00%|
|8 years to 10 years||6.35%||6.85%|
Note: BOI RD rates are subject to change periodically
Bank of India RD interest rates are higher than their savings account rates. Interest on BOI RD is compounded every quarter. Bank of India will pay the interest and maturity amount to the investor upon maturity. The interest rates for regular citizens range from 6.25%-7.7%. For senior citizens, the interest rates range between 7.75%-7.2%. Moreover, senior citizens are paid an additional interest of 0.5% on their RD investments. The interest earned on BOI RDs is taxable as per individual investor's respective income tax slab rates.
Below are the factors affecting Bank of India RD interest rates
- Investment horizon: The interest rates of Bank of India vary with the tenure of the RD.
- Age of the investor: The age of an investor is also a determinant of RD interest rate. Usually, senior citizens are paid an additional interest rate.
- Economic condition:Recurring deposit interest rates are also based on current economic conditions. Repo rate and inflation majorly affect Bank of India RD interest rates.
What are the documents required to open an RD account in BOI?
For opening a Bank of India RD, account following are the list of documents required:
- Account opening form
- Recent passport size photograph
- KYC Documents
- For Company & Individual: PAN Card, Driving License, Voter's ID, Aadhar Card and Passport Copy
- HUFs: HUF declaration deed, self-attested PAN card, bank statement of the HUF
- For Partnership Firms: Certificate of Incorporation, identity proofs of all the signatories and Partnership deed
However, to invest in an RD recurring deposit, one has to meet its eligibility criteria. Following is the eligibility criteria to invest in BOI Recurring Deposit is:
- Resident Individuals
- Non-Resident Indians (NRIs)
- Persons of Indian Origin PIOs
- Sole proprietorship firms
- Trusts and companies
- Partnership Firms
- Public and Private Limited companies
Frequently Asked Questions
What is the highest RD rate for Bank of India?
The highest interest rate on BOI RD is 6.7% for a tenure of 2-3 months. For the same tenure, senior citizens are offered an interest rate of 7.2%.
How are RDs taxed?
Investment in BOI RDs is not eligible for tax savings under Section 80C of the Income Tax Act, 1961. Moreover, the interest that one earns from investment in BOI RDs is taxable as per their respective income tax slab rates. Also, BOI deducts TDS of 10% if the interest income exceeds INR 40,000 per annum. For senior citizens, the TDS threshold limit is higher at INR 50,000. The 10% rate is applicable if the investor discloses PAN Card details, else it is 20%. Also, one can use Scripbox’s Income Tax Calculator to estimate their tax liability.
Is there a Premature withdrawal facility of recurring deposits available with Bank of India?
BOI allows investors to prematurely withdraw their RD recurring deposit. However, the bank will charge a penalty for the same. Following are the penalty rules.For deposits below INR 5 lakhs, that are withdrawn after completion of 1 year, the bank will not charge a penalty. For deposits below INR 5 lakhs, that are withdrawn before completion of 1 year, the bank will charge a penalty of 0.5% on interest.All deposits above INR 5 lakhs, attract a penalty of 1%.
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