IOB RD Calculator - Calculate IOB Recurring Deposit Returns Online
IOB RD calculator is a simple tool which is available online that estimates the returns from RD investment. It calculates the interest as well as the maturity amount from investment in IOB RD. This article covers the Indian Overseas Bank recurring deposit calculator and its interest calculation in detail.
Recurring Deposit Calculator
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What is an IOB RD Calculator?
IOB RD calculator is an online tool that helps in estimating the interest earned by investing in a recurring deposit. The maturity amount is the sum of all monthly investments and the interest earned during the investment tenure for recurring deposits. Also, for recurring deposits interest compounding happens on a quarterly basis.
IOB offers multiple schemes to suit a wide range of customers. One can choose between a range of tenures ranging between six months to 120 months. The minimum deposit amount for Indian Overseas Bank recurring deposit is INR 50 per month and thereafter in multiples of INR 5.
The IOB RD calculator determines the interest and also the value of the investment at a future date. The IOB RD calculator is a simple tool, and it works on the following inputs:
- Monthly deposit amount: Monthly amount that one deposits in an RD account.
- Interest rate: The income that the IOB recurring deposit investment earns. IOB determines the recurring deposit interest rates. The interest rates of recurring deposits vary for different banks and are available online.
- RD term: It is the tenure of the RD (in years).
On entering the above details in the IOB RD calculator, the following results are generated:
- Total investment: Sum of all monthly deposits in the scheme.
- Wealth Gained: Interest income on recurring deposits.
- Total Corpus created: Sum of all monthly investments and the wealth gained. In other words, it is the maturity amount that one receives at the end of their investment tenure.
How to use an IOB RD Calculator?
One can use the IOB RD calculator online for free. The calculator is very simple and easy to use. Entering the details such as monthly deposit amount and IOB recurring deposit rate helps in determining the maturity value. The calculator automatically computes the wealth created from an investment. Furthermore, the calculator works on the future value formula to determine the maturity value of the investment. The following example helps in understanding the IOB RD calculator better.
Ms Neerja plans to invest INR 30,000 per month in a recurring deposit scheme for five years. The IOB recurring deposit rate is 6.80%. The maturity value of the investment for Ms Neerja using the IOB RD calculator is:
The following are the RD Calculator inputs:
- Monthly investment amount: INR 30,000
- IOB RD Interest Rate: 6.80%
- RD Term: 5 years
On entering the above inputs, the calculator displays the following outputs:
- Total Investment: INR 18,00,000
- Wealth Gained: INR 3,46,627
- Total Corpus Created: INR: 21,46,627
The investment of INR 18,00,000 made today at 6.80% interest per annum would be INR 21,46,627 in five years. The interest income for Ms Neerja will be INR3,46,627.
Benefits of using an IOB Recurring Deposit Calculator
The following are some of the benefits of using the IOB recurring deposit calculator:
- Simple and easy to use: The IOB recurring deposit calculator is easy to use. All that one has to do is enter some inputs to calculate their return.
- Saves time: The calculator determines the results within seconds. It saves time for individuals from performing complex calculations.
- Accurate results: The calculator provides accurate results, and also the chance for error is almost nil.
- Comparison: One can use the calculator to compare multiple recurring deposits RD. The comparison helps in choosing a scheme that benefits them the most.
- Future planning: One can effectively do their financial planning by analysing the outputs from the calculator. The RD calculator estimates future returns from an investment. Also, estimating the potential returns will help one plan their investments and financial goals better.
- Free to use: The calculator is available online. One can use multiple times to compare returns from different recurring deposit investments.
How is interest and maturity amount on an IOB RD calculated?
Indian Overseas Bank RD interest rates are decided under the purview of Reserve Bank of India guidelines. Indian Overseas Bank RD interest rates range between 5.75%-6.8%. Interest on IOB RDs is compounded every quarter, and until then the RD will earn simple interest. For example, if an investor invests in IOB RD in April. The RD will earn a simple interest for the month of April, May and June. At the end of June, the interest will earn interest. The Reserve Bank of India decides the RD quarters. 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 an IOB RD.
Where M is the maturity value
R is the monthly investment amount that the investor wants to invest.
n is the number of quarters. The investment tenure of RDs is in quarters.
i = interest rate/400. Indian Overseas Bank sets the interest rate on IOB RD as per RBI guidelines.
Mr Krishna wants to invest INR 15,000 per month in an RD scheme for a tenure of 6 years or 72 months. The interest rate offered by the scheme is 6.8%. Mr Krishna can calculate the interest and maturity amount using the following formula.
M = 15000*[(1+6.8/400)^(72-1)](1-(1+6.8/400)^(-1/3))
M = 13,34,912
For a total investment of INR 10,80,000. The interest earned is INR 2,54,912, and the maturity value is INR 13,34,912.
Current IOB RD interest rates
|Tenure||General RD Interest Rates||Senior Citizen RD Interest Rates|
|180 days to 269 days||5.75%||6.25%|
|270 days to 364 days||6.25%||6.75%|
|1 year to 1 year 364 days||6.60%||7.10%|
|2 years to 2 years 364 days||6.75%||7.25%|
|3 years to 10 years||6.80%||7.30%|
Note: IOB RD rates are subject to change periodically
IOB Rd interest rates are higher than their savings account. Interest on Indian Overseas Bank RD is compounded every quarter. IOB will pay interest and investment amount upon maturity. The interest on IOB RDs range between 5.75%-6.8%. For senior citizens, the interest rages between 6.25%-7.3%. Moreover, senior citizens are offered an additional interest rate of 0.5%. Also, the interest on RDs is taxable as per individual investor's tax slab rates.
Below are the factors affecting IOB Bank RD interest rates
- Investment horizon: RD interest rates differ with the investment tenure. Longer the investment tenure, higher will be the RD interest rate.
- Age of the investor: RD interest rates for senior citizens are higher than regular citizens.
- Economic condition:Current economic conditions also form the basis for RD interest rates. Repo rate and inflation majorly affect IOB RD interest rates.
What are the documents required to open a recurring deposit account in IOB?
For opening an IOB recurring deposit account following are the list of documents required:
- Account opening form
- Recent passport size photograph
- KYC Documents
- For Company & Individual: PAN Card, Driving License, Aadhar Card, Voter's ID, and Passport Copy
- HUFs: HUF declaration deed, bank statement of the HUF, along with self-attested PAN card
- For Partnership Firms: Certificate of Incorporation, Partnership deed, and identity proofs of all the signatories.
However, to invest in a recurring deposit, one has to meet its eligibility criteria. Following is the eligibility criteria to invest in IOB 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 IOB?
The highest interest rate on IOB RD is 6.8% for a tenure of 3-10 years. For the same tenure, senior citizens are offered 7.3%.
How are RDs taxed?
Investment in IOB RDs is not eligible for tax exemption. Moreover, the interest income is also taxable as per the individual investor’s income tax slab rates. Additionally, IOB cuts TDS of 10% if the interest income exceeds INR 40,000. For senior citizens, the TDS threshold is INR 50,000. In case the investors don't submit PAN Card details, the TDS rate applicable is 20%. Also, one can estimate their tax liability using Scripbox Income Tax Calculator.
Is there a Premature withdrawal facility of recurring deposits available with IOB?
IOB allows investors to withdraw their RD investments prematurely with a penalty. The bank also allows investors to close their RD account prematurely.
Does IOB offer a loan against RD?
Yes, IOB allows investors to take a loan against their RD investment. Investors can take a loan up to 90% of the deposit and accrued interest amount. Also, Indian Overseas Bank decides the terms of the loan. Taking a loan against IOB RD will help investors meet liquidity requirements without having to break the RD investment. Moreover, they will not have to go through the entire loan process.
Investors can take loans against property (home loan), education loan, business loan, etc. against IOB RD. Moreover, they can use a loan EMI calculator to estimate the loan EMI amount. Scripbox's loan EMI calculator can be used as a personal loan EMI calculator, car loan calculator, and also home loan calculator. Investors can also use the calculator in different scenarios by changing the personal loan interest rate, car loan interest rate, and home loan interest rate.
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