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IDBI, short for the Industrial Development Bank of India, is one of the leading private sector banks in India. It offers attractive rates up to 5.90% on its recurring deposits scheme. If you are thinking of opening an RD account in this bank, you should consider checking the maturity value with the help of the IDBI RD calculator. One can choose an RD scheme tenure as per his/her requirements, which also forms the main criteria for deciding the rates on the RD.

## IDBI RD Rates

 Tenure General Citizen Rates Senior Citizen Rates 1 year 5.85% 6.35% 1 year 1 day to 2 years 5.75% 6.25% 2 years 1 day to 3 years 5.80% 6.30% 3 years 1 day to 5 years 5.75% 6.25% 5 years 5.90% 6.40% 5 years 1 day to 10 years 5.80% 6.30%

## How to Calculate the Maturity value using IDBI RD Calculator?

While using the RD calculator, all you have to do is provide the basic details of your RD account in the fields provided and you will be able to see the results within seconds. The details to be entered are tenure, rate of interest, and monthly investment.

## How is Interest Rate Calculated on IDBI Bank Recurring Deposit?

Recurring Deposit amount reflects the compound interest only after the completion of the first quarter. The compounding of the RD amount takes place once after every quarter as listed above; until then a simple interest calculation is applicable. The financial quarters of a year are given below:

• Quarter 1 – April to June
• Quarter 2 – July to September
• Quarter 3 – October to December
• Quarter 4 – January to March

Compound Interest formula for calculating RD maturity value is:

M=R[(1+i) (n-1)]/1-(1+i)(-1/3))

Here,

• M denotes Maturity value
• R denotes Monthly Installment
• i denotes the rate of interest divided by 4
• n denotes the tenure (in quarters)

Let’s understand the above-given formula with the help of an example:

Suppose, Dinesh wants to calculate how much interest he will earn if he opens an RD account for 2 years with a monthly investment of Rs 4500 at the rate of 7%. Using the formula, we have,

M = 4500[(1+7/400)(8-1)]/1-(1+7/400)(-1/3)

M = Rs. 116,189

Calculating the interest with the help of the IDBI RD Calculator is much simpler as compared to the manual procedure and the room for mistakes is also very less if you provide all the values correctly.

## Factors Affecting RD Earnings

The rate of interest for the depositor is decided based on certain factors that are listed below:

Tenure

The duration for which you keep investing the fixed amount in a recurring deposit account is called the tenure of the RD. The interest rate depends on various factors and tenure is one of the most important ones. Your RD interest rate varies across all the tenure options.

Age of the Applicant

Usually, senior citizens are privileged with a bit higher rates than general citizens by banks and NBFCs (Non-banking Financial Company). The extra rates may range from 0.50% to 0.75% over the regular deposit rates for general citizens.

Current Economic Environment

Banks and other financial institutions that provide recurring deposits schemes keep on updating their interest rates with reference to the current economic conditions. There are various reasons that are instrumental for this like, change in repo rate by the RBI, inflation, and so on. Hence, the prevailing conditions do play a vital role in evaluating RD rates.

Inflation

Rising prices, also called inflation, neutralize the money that you earn from your investments. For example, if the inflation is 8% and your money is in a deposit that earns 9%, you are earning only 1% in this case. However, moderate inflation has a positive impact on interest rates.

Recession

When a recession takes place, RBI tries to increase liquidity in the market, and the banks, in turn, reduce the RD rates as a result of low credit demand.

Repo rate

Repo Rate, short for repurchase rate is the key monetary policy rate of interest at which the central bank or the Reserve Bank of India (RBI) lends short term money to Indian banks, essentially to control credit availability, inflation, and the economic growth. A repo rate cut might force the bank to bring down the RD interest rates.

## Benefits of Using IDBI RD Calculator

• Less scope of mistakes as the IDBI recurring deposit calculator computes the result for you instead of using complicated formulas
• Can be used multiple times to calculate the maturity as per the chosen tenure
• Instant results which can help you decide the desired RD scheme in a fraction of seconds

IDBI Bank RD Calculator – FAQs

Ques. Does the recurring deposit calculator of IDBI bank show accurate results?

Ans. Yes, it has been programmed in such a way that it reflects the accurate results given that you enter the correct values

Ques. When is simple interest calculated in the case of RDs?

Ans. If you are opening a recurring deposit in the middle of an ongoing financial quarter, for example in the month of May, the deposited amount will earn simple interest until the June end. Following that, the interest will be compounded as the new quarter starts.

Ques. Does the repo rate cut affect all types of interest rates?

Ans. No, it affects the investment-related interest rates such as FD and RD but benefits the loan takers.

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