BOI RD Calculator 2023
Bank of India RD calculator helps you estimating the interest and maturity amount when you invest in BOI recurring deposit schemes. Input monthly deposit amount, latest BOI RD account interest rate and investment tenure to calculate and plan your savings.
Check: BOI RD Interest Rates 2023
|BOI RD Calculator||Inputs|
|Interest Rate||7.20% p.a.|
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 5.75%. 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: 5.75%
- RD Term: 7 years
On entering the above inputs, the calculator displays the following:
- Total Investment: INR 4,200,000
- Wealth Gained: INR 975,446
- Total Corpus Created: INR: 5,175,446
INR 4,200,000’s investment at 5.75% interest per annum would be INR 5,175,446 in seven years. The interest income for Mr Suraj will be INR 975,446.
Benefits of using a BOI RD 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 to Calculate BOI RD Interest and Maturity Amount?
Bank of India decides the recurring deposit rate under the purview of RBI guidelines. The bank of India RD interest rate ranges between 5% to 6.75% p.a.. 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.
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 5.75%. Mr Suresh can calculate the interest and maturity amount using the following formula.
M = 10000*[(1+5.75/400)^(96-1)](1-(1+5.75/400)^(-1/3))
M = 1,290,690
For a total investment of INR 960,000, Mr Suresh earned, and interest of INR 259,690 and the maturity value is INR 1,290,690
Frequently Asked Questions
The interest rate for regular citizens ranges between 5% to 6.75% p.a. and senior citizens are offered an interest rate of 5.4% to 7.25% p.a.
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.
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%.