HDFC Recurring Deposit Calculator
HDFC RD calculator is an online tool that helps in calculating the wealth gained on an RD investment. In other words, it estimated the maturity and interest amount from an RD investment. HDFC RD calculator is available online and is free to use. In the article, we have covered the HDFC RD calculator and recurring deposit rate calculation in detail.
Recurring Deposit Calculator
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What is an HDFC RD Calculator?
HDFC Bank RD calculator is an online tool that helps in estimating the interest earned by investing in a recurring deposit. For recurring deposits, the maturity amount is the sum of all investments and the interest earned during the investment tenure. Also, the interest of RD gets compounded quarterly.
HDFC bank offers RD for different tenure options. One can choose between a range of tenures between six months to ten years. For Non-Resident Indians, the minimum tenure is twelve months. The minimum amount for RD investment is INR 1,000 and thereafter in multiples of INR 100. Also, the maximum investment amount in RD per month is INR 1,99,99,900.
The HDFC RD calculator calculates the interest and also the value of the investment at a future date. A calculator is a simple tool that requires one to enter the following inputs in the RD calculator:
Monthly deposit amount: It is the amount one intends to invest every month in a recurring deposit.
Interest rate: It is the income that one earns on their RD investment. The banks set the recurring deposit interest rate. The interest rates of RDs of multiple banks are available online.
RD term: It is the tenure of the recurring deposit investment in months.
Once an individual enters the above inputs in the calculator, the following outputs or results are determined:
Total investment: It is the total of all monthly investments the investor makes in the RD.
Wealth Gained: The wealth gained is the interest income on RD investment.
Total Corpus created: It is the sum of all investments (total investment) and the wealth gained. In other words, it is the maturity value of the RD investment.
How to use an HDFC RD Calculator?
One can use the HDFC RD calculator online for free. Using the calculator is quite simple. One has to enter a few basic details such as monthly investment amount and HDFC Bank recurring deposit rate. The calculator helps in determining the wealth created from an investment. To determine the investment value, the calculator uses the future value formula. The following example will help in understanding the HDFC RD calculator better.
Mr Bhargav wishes to invest INR 25,000 per month in a recurring deposit scheme for five years. The HDFC bank RD rate is 5.70%. The maturity value of the investment for Mr Bhargav can be determined by using the HDFC RD calculator.
Inputs for the calculator:
Monthly investment amount: INR 25,000
HDFC Bank recurring deposit rate: 5.70%
RD Term: 5 years
Outputs for the calculator
Upon entering the above inputs in the calculator, the following outputs shall be displayed:
Total Investment: INR 15,00,000
Wealth Gained: INR 2,37,854
Total Corpus Created: INR: 17,37,854
The investment of INR 15,00,000 made today at 5.70% interest per annum would be INR 17,37,854 in five years. The interest income for Mr Bhargav will be INR 2,37,854.
Benefits of using an HDFC Recurring Deposit Calculator
The following are the benefits of using HDFC recurring deposit calculator:
Simple and easy to use: The RD calculator is a simple tool that an individual can easily use by entering the inputs to calculate their return.
Saves time: The calculator performs complex calculations within seconds, saving investors time.
Accurate results: The computations by the calculator are accurate, and the chance of error is almost zero.
Comparison: Investors can compare HDFC Bank RD interest rates of various RDs and choose the one that benefits them. Hence, the calculator helps the investor choose the best plan.
Future planning: Investors can plan their investment goals by analyzing the outputs given by this calculator. Since the calculator estimates the future value of an RD investment. As a result, they will know how much return the investment would generate in the future. Hence, this allows them to plan their investments and financial goals.
Free to use: The calculator is a free online tool and can be used multiple times to calculate and compare returns from RD investment.
How is interest and maturity amount on an RD calculated?
Recurring deposit interest rate is compounded quarterly. Until then, the investment will earn simple interest. Let's take an example of an investor who invested in an RD in the month of November. The investor will earn a simple interest until December. At the end of the quarter, in December, the interest is compounded. In other words, the interest will earn interest only in December. The financial quarters for HDFC Bank recurring deposits are:
- First Quarter: April to June
- Second Quarter 2 July to September
- Third Quarter: October to December
- Fourth Quarter 4 January to March
The formula for RD interest rate and maturity value
The interest and maturity amount of HDFC Bank recurring deposit is calculated using the following formula:
Where, M = Maturity value
R = Monthly Instalment
N = Number of Quarters (tenure)
i = Rate of interest/400
- Monthly installment: It is the amount that the investors will invest every month for a pre-defined period.
- The number of quarters: It is the tenure of the investment. In other words, the number of quarters the investor will stay invested in an RD scheme.
- Rate of interest: It is the interest offered by banks on the RD. The interest on RD varies with the tenure of investment. The bank decides RD rates.
Let's understand this better with an example. Mr Akhil wants to invest INR 10,000 per month in an RD scheme for a tenure of 5 years or 60 months. The interest rate offered by the scheme is 6%. To calculate the maturity value, Mr Akhil will use the following formula.
M = 10000*[(1+6/400)^(20-1)](1-(1+6/400)^(-1/3))
M = 7,00,636
The total investment in INR 6,00,000. The interest earned is INR 1,00,636
Current HDFC RD interest rates
HDFC Bank recurring deposit interest rates for regular citizens and senior citizens are given below:
|Tenure||General RD Interest Rates||Senior Citizen RD Interest Rates|
HDFC Bank’s recurring deposit rate is higher than its savings account. The interest in RDs is compounded quarterly. The investor will receive the interest at the time of maturity, along with the investment amount. The highest interest rate for HDFC RD is 5.75 % (6.25% for senior citizens) for a tenure of 27 months to 120 months (2.25 years to 10 years).
What are the documents required to open an RD account in HDFC Bank?
While opening a recurring deposit account with HDFC, the following are the list of documents required:
- Account opening form (filled and duly signed)
- Recent passport size photograph
- KYC Documents for Individual & Company: PAN Card, Passport Copy, Aadhar Card, Voter's ID, and Driving License
- For HUFs the KYC documents are HUF declaration deed, bank statement of HUF, and self-attested PAN card
- The JYC documents for Partnership Firms are Certificate of Incorporation, Partnership deed, and ID proofs of all authorized signatories.
However, to invest in an RD, one has to meet the eligibility criteria. The eligibility criteria to invest in HDFC Bank Recurring Deposit is:
- Resident Individuals
- Minors over ten years with an identity proof on their name
- Minors below or equal to 10 years of age can open an RD account under the guardianship of a natural or legal guardian.
- NRIs and PIOs (Non-Resident Indians and Persons of Indian Origin)
- Sole proprietorship firms
- Trusts and companies
- Partnership Firms
- Public and Private Limited companies
RDs provide stability of returns to an investment portfolio. However, the returns from them are lower than other investment options. Instead of RDs, investors can choose good debt funds which have returns that are quite stable with high liquidity.
Frequently Asked Questions
What is the highest RD rate for HDFC Bank?
The highest RD rate for HDFC Bank for regular citizens is 5.75% for the tenure of 27 months to 120 months. For the same tenure, the senior citizen RD rate is 6.25%
How are RDs Taxed?
RD investments do not qualify for tax savings under Section 80C of the Income Tax Act. In other words, interest from RD investments is taxable.The Interest on RDs is taxable at the individual's income tax slab rate. Additionally, the interest income is subject to TDS of 10% (20% if the Pan Card is not provided). The TDS threshold for AY 2020-21 is INR 40,000 (INR 50,000 in the case of senior citizens).Furthermore, one can use Scripbox's Income Tax Calculator to determine their taxable income. Also, they can determine.
Can one take a loan against their RD?
Yes, one can take a loan against their RD investment. However, not all banks offer loans against RDs. Some banks offer 75-90% of the RD amount as a loan. Loans against RD can be easily available at 1-2% higher interest than the RD rate. The RD investment acts as collateral for the loan.A bank offers loans such as loans against property (home loan), business loans, an education loan, etc., against an RD. Also, one can calculate the loan EMI using the Scripbox loan EMI calculator. The loan EMI calculator also works as a car loan EMI calculator, home loan EMI calculator, and personal loan EMI calculator. One can use the calculator to compare in multiple scenarios by tweaking the car loan interest rate, personal loans interest rate, and home loan interest rate.
Is there a Premature withdrawal facility of recurring deposits available with HDFC?
The HDFC Recurring Deposit account has a minimum lock-in period of one month. Also, in the case of premature closure of the account (within a month), no interest shall be paid. Moreover, the depositor only gets their principal amount.
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