Indian Bank is a government-backed financial services company headquartered in Chennai. It was recently merged with Allahabad Bank making it one of the largest amalgamated banks in India. The state-owned bank provides numerous deposit schemes to customers, one of the most prominent ones being the recurring deposit facility.

Individuals can deposit their surplus income every month in an Indian Bank RD account to earn a fixed rate of interest above what is offered on savings deposits. They can also calculate their earnings from their recurring deposits with the help of an Indian Bank RD calculator.

This calculator is an online tool provided for prospective RD customers. They can use it to calculate their returns from deposits on maturity. Indian Bank RD comes in two variants – Variable RD scheme and Normal RD scheme.

In the former variant, individuals can deposit varying sums of money every month. In the latter variant, individuals need to invest a fixed sum every month. The latter scheme also offers the flexibility of the lock-in period, whereas in the case of a variable RD scheme there’s a fixed maturity period.

On that note, they can also utilize the Indian Bank Recurring Deposit calculator to determine the lock-in period for their deposits. The interest rate is a crucial component in relation to the maturity amount and is directly related to the lock-in period of deposits.

In this article

**Indian Bank RD Interest Rates**

The interest rates offered on recurring deposit accounts by the amalgamated Indian Bank as of 1st May 2020 are presented in the table below –

Maturity period | Rate of interest for deposits less than Rs.2 Crore | Rate of interest for deposits more than Rs.2 Crore and less than Rs.5 Crore |

6 months / 180 days | 4.75% | 3.75% |

181 days to less than 270 days/9 months | 5.25% | 4.75% |

270 days to less than 365 days/1 year | 5.25% | 4.75% |

1 year | 5.75% | 5% |

More than 1 year and less than 2 years | 5.65% | 5% |

2 years to less than 3 years | 5.65% | 5% |

3 years to less than 5 years | 5.65% | 5% |

5 years | 5.65% | 5% |

Above 5 years | 5.65% | 5% |

**Note** – These rates also apply to NRI customers of Indian Bank RD.

Senior citizens are eligible to earn an additional 0.50% interest rate on their deposits.

Read more information about Indian Bank RD Rates

**How to Calculate Compound Interest on Indian Bank Recurring Deposit?**

Interest in Indian Bank Recurring Deposit is calculated quarterly. Therefore, if an individual opens an RD account on 15th April 2020, his interest would be compounded on 15th July, 15th October, 15th January, and 15th April every year until maturity.

The Indian Bank RD calculator 2020 functions on the standard formula widely used across India for compound interest and maturity value calculation. It is expressed below –

**M = R x {(1 + n) x n – 1} / 1- (1 + i) ****(-1/3)**

Here,

- M denotes maturity value;
- R represents the monthly sum of deposits;
- n is the maturity period (in quarters);
- i is the rate of interest divided by 4.

*Example of RD calculation: *

*Ramesh opens a normal RD account in Indian Bank. He decides to deposit Rs.1000 per month for 36 months. Therefore, the rate of interest applicable on his deposits is 5.65% per annum. Now, in the context of the RD formula, R = Rs.1000, n = 12 [36 / 3], and i = 0.0141 [0.0565 / 4]*

M = Rs. [1000 {(1 + 12) x 12 – 1} / 1 – (1 + 0.141) (-0.0141/3)]

Or, M = Rs.39298.76

The manual calculation for RD returns can leave room for mistakes and yield inaccurate results. Therefore, individuals should consider using an Indian Bank RD calculator.

**Factors affecting Indian Bank RD Interest Earnings**

The factors that predominantly affect Indian Bank RD interest rates are discussed below –

**Tenure**

The tenure for which deposits are locked in influences the interest rate of an Indian Bank RD. Citing the interest chart mentioned above, it can be seen that the interest rate increases up until the threshold of 1 year to 5.75% and then decreases to 5.65% staying that way for all other maturity periods.

**Reverse repo rate**

The rate at which RBI avails overnight loans from financial institutions is known as reverse repo rate. Fluctuations in this rate also influence the interest rate for recurring deposits. A surge in reverse repo rate leads to an increase in RD interest rates.

**Deposit amount**

The interest rate on Indian Bank RD also varies on the amount of deposit. The interest rate for deposits above Rs.2 Crore is marginally lower than that of deposits below Rs.2 Crore.

**Age of the applicant**

If the depositor is a senior citizen, then he/she is eligible to earn a 0.5% additional interest rate.

**Benefits of Indian Bank RD Calculator**

The benefits of the Indian Bank RD interest calculator are –

- It is easy to use. It can be used any number of times, for different combinations of interest rates and principal.
- It provides accurate results instantaneously
- It can be used for comparison between returns across different maturity periods.
- It functions on the standard RD formula.

Therefore, individuals can use the Indian Bank RD interest rates calculator to compute their earnings beforehand; subsequently, making a more informed choice.