SBI RD Calculator - State Bank of India Recurring Deposit Calculator
SBI RD calculator is a tool that helps in estimating the maturity amount of an RD investment. It also calculates the interest earned on the investment. SBI RD calculator is a free tool available online. In this article, we have covered the SBI RD calculator and calculation of RD interest in detail.
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What is an SBI RD Calculator?
SBI Bank RD calculator is an online tool that an individual can use to estimate the interest earned by investing in a recurring deposit. For recurring deposits, the maturity amount is the sum total of all investments, plus the interest earned during the investment period. Also, RD interest gets compounded on a quarterly basis.
SBI bank offers RD for a host tenure option. One can choose between a range of tenures ranging between one year to ten years. The minimum amount for RD investment is INR 100 per month and thereafter in multiples of INR 10. Also, there is no limit on the maximum investment amount in RD.
The SBI RD calculator determines the interest and the value of the investment at a future date. The calculator is a simple tool that works on the following inputs:
Monthly deposit amount: It is the monthly investment amount one intends to deposit in an RD account.
Interest rate: It is the income from RD investments. The banks determine the recurring deposit interest rates. The interest rates of recurring deposits RD of different banks are available online.
RD term: It is the tenure of the recurring deposit investment in years.
Upon entering the above details in the calculator, it generates the following results:
Total investment: It is the sum of all monthly deposits in the RD.
Wealth Gained: It is the interest income on RD investments.
Total Corpus created: It is the sum of all investments and the wealth gained. In other words, it is the maturity value of the investment.
How to use an SBI RD Calculator?
One can use the SBI RD calculator online for free. The calculator is simple and easy to use. Entering the details such as monthly investment amount and SBI Bank RD interest rate helps in determining the maturity value. The calculator calculates the wealth created from an investment. Also, the calculator uses the future value formula to determine the maturity value of the investment. The following example helps in understanding the SBI RD calculator better.
Ms Shruti plans to invest INR 10,000 per month in a recurring deposit scheme for seven years. The SBI bank RD rate is 5.40%. The maturity value of the investment for Ms Shruti using the SBI RD calculator is:
The following are the inputs for the RD calculator:
Monthly investment amount: INR 10,000
SBI RD Interest Rate: 5.40%
RD Term: 7 years
Upon entering the above inputs in the calculator, the following outputs shall be displayed:
Total Investment: INR 8,40,000
Wealth Gained: INR 1,81,716
Total Corpus Created: INR: 10,21,716
The investment of INR 8,40,000 made today at 5.40% interest per annum would be INR 10,21,716 in five years. The interest income for Ms Shruti will be INR 1,81,716.
Benefits of using an SBI Recurring Deposit Calculator
The following are the benefits of using a recurring deposit calculator:
Simple and easy to use: The RD calculator is an easy to use the tool. Also, an individual can use it by entering the basic inputs to calculate their return.
Saves time: The calculator determines the results within seconds. Hence it saves investors time by performing complex calculations.
Accurate results: The results from the calculator are accurate, and also the chance for error is almost zero.
Comparison: Investors can use the calculator to compare interest rates of various recurring deposits RD. This comparison helps them choose the one that benefits them the most.
Future planning: Investors can plan their investments by analyzing the outputs given by this calculator. The calculator estimates the returns from an RD investment. Also, knowing the potential returns will help one plan their investments and financial goals in a better way.
Free to use: The calculator is an online tool that one can use multiple times to calculate and compare returns from their recurring deposit investments.
How is interest and maturity amount on an RD calculated?
The interest on RDs is set by the banks. The interest rate varies with the tenure of the investment. Interest on RD is compounded on a quarterly basis. Until then, the investment will earn simple interest. Let's take, for example, an investor invests in an RD in June. The investor will earn simple interest on the investment until September. At the end of the quarter, the interest will be compounded. In other words, the interest will earn interest. The quarters for RD investments are:
- First Quarter: April to June
- Second Quarter: July to September
- Third Quarter: October to December
- Fourth Quarter: January to March
The formula for RD interest rate and maturity value
Maturity amount and RD interest calculation are done using the formula below:
Where, M = Maturity value
R = Monthly Instalment
N = Number of Quarters (tenure)
i = Rate of interest/400
Monthly installment: It is the investment amount done on a monthly basis by the investor.
Number of quarters: Investment horizon of investment in quarters.
Rate of interest: The return that one can earn on the RD investment. The interest rate is set by the banks.
Ms Akshara wants to invest INR 15,000 per month in an RD scheme for a tenure of 7 years or 84 months. The interest rate offered by the scheme is 6.5%. Ms Akshara can do her RD interest calculation using the following formula.
M = 15000*[(1+6.5/400)^(28-1)](1-(1+6.5/400)^(-1/3))
M = 15,96,705
For a total investment of INR 12,60,000. The interest earned is INR 3,36,705, and the maturity value is INR 15,96,705.
Current SBI RD interest rates
SBI RD interest rates for regular citizens and senior citizens are given below:
|Tenure||General RD Interest Rates||Senior Citizen RD Interest Rates|
|1 year to 1 year 364 days||5.50%||6.00%|
|2 years to 2 years 364 days||5.50%||6.00%|
|3 years to 4 years 364 days||5.70%||6.20%|
|5 years to 10 years||5.70%||6.50%|
SBI RD interest rates are higher than its saving account. Interest on SBI RDs is compounded quarterly. Upon maturity, the investor will receive the investment amount and interest. The highest interest rate for SBI RD is 5.7% (6.5%) for a tenure of 5 years to 10 years.
How to open an RD account in SBI?
One can open an SBI RD account by visiting the nearest SBI bank branch or online through the bank's website.
For offline account opening, one has to duly fill in all the details in the RD account opening form. Along with the form, they have to submit the following documents:
- Recent passport size photograph
- KYC Documents
- For Individual & Company: PAN Card, Passport Copy, Aadhar Card, Voter's ID, and Driving License
- HUFs: HUF declaration deed, bank statement of HUF, and self-attested PAN card
- For Partnership Firms: Certificate of Incorporation, Partnership deed, and ID proofs of all authorised signatories.
Following is the procedure for opening the SBI RD account online:
- Log into the www.onlinesbi.com.
- On the 'Request Tab,' SBI customers have the 'e-fixed deposit' tab. To initiate the RD account opening process, one has to click on the 'e-RD/e-SBI Flexis Deposit link'.
- Select the 'e-RD' option and click on the 'proceed' button.
- In case an individual has multiple SBI accounts, they can choose the desired bank account for their recurring deposit amount. The money will get deducted from this account on a monthly basis. Fill the details such as monthly deposit amount and the tenure of the deposit.
- On clicking the 'Submit' button, the e-RD account opening is successful.
Upon the maturity of the account, the amount is credited back to the investor's SBI savings account chosen while opening the account.
How to close an RD account in SBI through online?
To close the SBI RD account, one has to login to their SBI account using the link www.onlinesbi.com. Under the e-RD tab, select the deposit account that one wishes to close. Click on the 'Close A/c' tab to complete the account closing by clicking on the 'Proceed' button.
What are the documents required to open an RD account in SBI Bank?
While opening a recurring deposit account with SBI, the following are the list of documents required:
- Account opening form (completely 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 include HUF declaration deed, bank statement of HUF, and self-attested PAN card
- For Partnership Firms, KYC documents 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. Following is the eligibility criteria to invest in SBI Bank Recurring Deposit is:
- Resident Individuals
- NRIs and PIOs (Non-Resident Indians and Persons of Indian Origin)
- Sole proprietorship firms
- Trusts and companies
- Partnership Firms
- Public and Private Limited companies
Recurring Deposits guarantee returns. However, their returns are lower than other investment options that offer better returns than these and additionally also provide liquidity. One of the investment options are debt mutual funds. Debt mutual funds offer predictable returns along with liquidity.
Frequently Asked Questions
What is the highest RD rate for SBI Bank?
The highest RD rate for SBI Bank for regular citizens is 5.40% for the tenure of five years to ten years. For the same tenure, the senior citizen RD rate is 6.20%. Returns from SBI recurring deposits can be calculated using SBI Bank RD calculator.
How are RDs Taxed?
Recurring deposit investments do not qualify for tax savings under Section 80C of the Income Tax Act. In other words, interest from recurring deposit investments is taxable.
Interest earned on recurring deposit schemes 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).
Additionally, one can determine their taxable income using Scripbox's Income Tax Calculator.
Does SBI provide Loan against RD?
Yes, the State Bank of India provides loans against recurring deposit accounts. SBI bank offers loans on 90% of the deposit amount. The recurring deposit account can be used as collateral for the loan. The loan interest rate is higher than the SBI Bank RD interest rate.
State Bank of India offers loans such as loans against property (home loan), business loans, and education loans, etc., against an RD account. Also, one can calculate the loan EMI using the Scripbox loan EMI calculator. The loan EMI calculator also works as a car loan calculator, home loan calculator, and personal loan EMI calculator. One can use the calculator to compare in multiple scenarios by tweaking the car loan interest rate, personal loan interest rate, and home loan interest rate.
Is there a Premature withdrawal facility of recurring deposits available with SBI?
In a scenario where the depositor misses six consecutive installments, the account shall prematurely be closed. Also, the balance is paid to the account holder. Also, premature closure of the recurring deposit account is available.
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