Kotak RD Calculator
Kotak Bank RD calculator is a simple tool available online and is free to use. It helps in estimating the interest and maturity amount from Kotak Bank RD investment. In this article, we have covered Kotak Mahindra Bank RD calculator and its interest calculation in detail.
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What is a Kotak Bank RD Calculator?
Kotak Mahindra Bank RD calculator is an online tool that helps in estimating the interest earned by investing in a recurring deposit scheme. For RDs, the maturity amount is the total of all monthly investments and the interest earned during the investment period. Also, for recurring deposits, the interest compounding is done on a quarterly basis.
Kotak Mahindra Bank offers multiple schemes for varying tenures. One can choose between tenures ranging between 12 months to 120 months. Also, the minimum deposit amount for Kotak Mahindra Bank recurring deposit investment is in multiples of INR 5,000 and INR 10,000.
The Kotak Mahindra Bank recurring deposit calculator determines the interest amount and the investment value at a future date. The calculator is an easy-to-use tool, and works on the following inputs:
- Monthly deposit amount: Monthly investment amount towards a recurring deposit account.
- Interest rate: The interest income that an RD investment earns. Kotak bank determines the recurring deposit interest rates. The recurring deposit rate for different banks is available online.
- RD term (in years): The tenure of the recurring deposit investment.
On entering the above details, the RD calculator computes the following:
- Total investment: The total of monthly deposits in the scheme.
- Wealth Gained: Interest income from the recurring deposit scheme.
- Total Corpus created: The total of monthly investments and the wealth gained. In other words, it is the amount that one receives from their RD investments upon maturity.
How to use a Kotak RD Calculator?
The Kotak RD calculator is available online for free. It is easy to use and also a simple tool. One has to enter the details such as monthly deposit amount and Kotak Bank recurring deposit rate to determine the maturity value. The calculator helps in computing the wealth created from an investment. Furthermore, the Kotak RD calculator uses the future value formula to determine the investment’s maturity value. The following example helps in understanding the Kotak RD calculator better.
Ms Ramya plans to invest INR 50,000 per month in a recurring deposit scheme for ten years. The Kotak bank RD rate is 5.50%. The maturity value of the investment for Ms Ramya using the Kotak RD calculator is:
The following are the Kotak Bank RD Calculator inputs:
- Monthly investment amount: INR 50,000
- Axis Bank RD Interest Rate: 5.50%
- RD Term: 10 years
On entering the above inputs, the RD calculator computes the following:
- Total Investment: INR 60,00,000
- Wealth Gained: INR 20,00,975
- Total Corpus Created: INR: 80,00,975
The investment of INR 60,00,000 made today at 5.50% interest per annum would be INR 80,00,975 in ten years. Moreover, the interest income for Ms Ramya will be INR 20,00,975.
Benefits of using a Kotak Recurring Deposit Calculator
The following are some of the benefits of using the Kotak Bank RD calculator:
- Simple and easy to use: The calculator is a simple tool, and only requires few details to estimate potential returns.
- Saves time: The calculator computes the potential return and interest income faster, helping individuals perform complex calculations.
- Accurate results: It provides accurate results, and also has a zero chance for error.
- Comparison: One can use the RD calculator to compare different recurring deposit schemes. The comparison helps in finalising a scheme that benefits the investor the most.
- Future planning: The Kotak bank calculator estimates the returns from an investment, and helps in better financial planning. Moreover, estimating returns helps in planning investments and goals in a better way.
- Free to use: The calculator is available online for free. One can use it multiple times to compute and compare returns from different recurring deposit investments.
How is interest and maturity amount on an RD calculated?
The banks decide recurring deposit interest rates under the purview of RBI guidelines. The RD interest rates range between 5%-7% for most banks. Interest on RDs is compounded every quarter, and until then the RD will earn simple interest. For example, if an investor invests in an RD in August, the RD will earn simple interest until September. At the end of September, the interest will be compounded. In other words, the interest will earn interest. RD investment quarters are April to June, July to September, October to December, and January to 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 Kotak Bank RD.
Where M is the maturity value
R is the monthly instalment. It is the amount the investor wants to invest on a monthly basis.
n = number of quarters. For RDs, the investment tenure is in quarters.
i = interest rate/400. The interest rate on Kotak Bank RD is set by Kotak bank under RBI guidelines.
Mr Karthik wants to invest INR 5,000 per month in an RD scheme for a tenure of 4 years or 48 months. The interest rate offered by the scheme is 5%. Mr Karthik can calculate the interest and maturity amount using the following formula.
M = 5000*[(1+5/400)^(48-1)](1-(1+5/400)^(-1/3))
M = 2,66,063
For a total investment of INR 2,40,000. The interest earned is INR 26,063, and the maturity value is INR 2,66,063.
Current Kotak RD interest rates
Kotak Bank RD interest rates are higher than their savings account rates. Interest on Kotak bank RD is compounded every quarter. The bank will pay the interest and maturity amount to the investor upon maturity. Kotak Bank sets the Kotak RD rates.
Below are the factors affecting Kotak Bank RD interest rates
- Investment horizon: RD interest rates vary with investment tenure. The bank pays different interest rates for different tenures.
- Age of the investor: Interest rates vary with the age of the investor. Usually, senior citizens are offered preferential interest rates than regular citizens.
- Economic condition:RD interest rates are also based on current economic conditions. Repo rate and inflation majorly affect Kotak Bank RD interest rates.
|Tenure||General RD Interest Rates||Senior Citizen RD Interest Rates|
|21 months to 10 years||5.00%||5.50%|
What are the documents required to open an RD account in Kotak Bank?
For opening an RD account with Kotak bank, following is the list of documents required:
- Account opening form
- Recent passport size photograph
- KYC Documents
- For Company & Individual: PAN Card, Voter’s ID, Aadhar Card, Passport Copy, and Driving License
- HUFs: HUF declaration deed, self-attested PAN card, and HUF’s bank statement
- Partnership Firms: Certificate of Incorporation, Partnership deed, and ID proof of the partners.
However, to invest in a Kotak bank recurring deposit, one has to meet the eligibility criteria. Following is the eligibility criteria to invest in Kotak Bank Recurring Deposit is:
- Resident Individuals
- Non-Resident Indians (NRIs) and Persons of Indian Origin PIOs
- Sole proprietorship firms
- Trusts and companies
- Partnership Firms
- Public and Private Limited companies
Frequently Asked Questions
The highest interest rate on Kotak RD is 5.5% for a tenure of 12-21 months. For the same tenure, senior citizens are offered an additional 0.5%. Hence the highest Kotak RD interest rate for senior citizens is 6%.
Investment in Kotak Bank RDs does not qualify for tax saving under Section 80C of the Income Tax Act. Moreover, the interest income is taxable. The applicable tax rate is as per the individual’s income tax slab rates. Also, the interest income from Kotak RDs is subject to TDS of 10% if the interest income exceeds INR 40,000 (INR 50,000 for senior citizens). If the investor doesn’t submit PAN Card details, then the TDS rate will be 20%. Also, one can estimate their tax liability with Scripbox Income Tax Calculator.
Kotak Bank allows investors to withdraw their RD investment prematurely. If the investment is withdrawn in the first month of investment, the bank will not pay any interest. The bank will charge a penalty for investments withdrawn after one month has elapsed from the date of investment. The penalty is 0.5% on the interest of the RD.