Invest in RD: Recurring Deposit (RD) is a popular investment option. For those investors who do not want to take market risk, this is a scheme that gives guaranteed returns. This facility is available in government and private banks along with post offices. Generally, annual interest on RD is around 5.5% to 6.7%. The biggest facility of recurring deposit is that here you can invest a fixed amount every month like SIP. In this, interest is added to your account by compounding every quarter. At present, many people are confused about their interest in RD. We are telling you how the interest amount is added to your RD account.

RD: There are 2 types of schemes

There are 2 types of schemes in this. In regular recurring deposits, a pre-determined amount has to be deposited every month. Whereas in flexi recurring deposit, this amount can be increased or decreased later.

RD: Interest on monthly investment

The formula for interest on monthly investment is: M = R [(1+i)n – 1] / 1-(1+i)(-1/3). Here M means the amount at maturity. While R is the total number of installments, n is the total number of quarters and i is the interest rate.

RD: On investing all at once?

The formula for lump sum investment is: A = P (1 + r/n) ^ nt. Here A means the amount at maturity. P means the amount invested, r means the interest rate, n means the total number of quarters and t means the total number of days the investment was made.

RD: How much is the interest where?

The Post Office is giving 6.7% annual interest on recurring deposits. HDFC Bank is giving 5.5% interest to ordinary citizens on a 10-year RD. SBI is giving 5.50% annual interest on RD. While ICICI Bank is giving 5.50 percent interest. The interest rate is slightly higher for senior citizens.