Kotak Bank, one of the leading private banks in India, offers attractive interest rates on its Recurring deposit scheme. A recurring deposit allows investors to invest periodically into an account and earn a set rate on the principal that accumulates. RD schemes by Kotak bank can be opened by individuals who are looking to save money for future emergencies by making regular monthly instalments. One can use the Kotak bank RD calculator anytime to calculate the interest accumulated at the end of the tenure.
To calculate the interest on your RD account, all you have to do is enter the basic details pertaining to your RD accounts such as the monthly investment amount, tenure, and rate of interest.
|Tenure||FD Interest Rates for General Citizens||
FD Interest Rates for Senior Citizens
|3 years to 3 years 364 days||4.75%||5.25%|
|4 years to 4 years 364 days||4.75%||5.25%|
|5 years to 10 years||4.50%||5.00%|
The RD calculator for Kotak Bank is very easy to use and provides you with an accurate result in a hassle-free way. To sail through the calculation process, just follow the steps given here
The compound interest on a Kotak Bank Recurring Deposit is only added after the first quarter. After every quarter, the compounding occurs; hence until then, a simple interest calculation will be applicable. For example, in case an individual avails of a recurring deposit scheme in the month of February, the amount will only provide a simple interest until the month of March, after which interest will be compounded.
The formula used for Simple Interest is –
The Recurring Deposit Interest formula used for calculating the interest, provided by the Indian Bank Association, is as follows-
M = R x [(1 + n) x n – 1] / 1- (1 + i) (-1/3)
With the help of the above formula, in case a depositor invests Rs.2,000 in the month of January, then by using the simple and compound interest formulas provided, he/she will have Rs. 25,603.80 as the maturity amount at the end of the year if we consider the rate of interest at 12%. However, it is advisable to use the Kotak Mahindra Bank RD Calculator to avoid cumbersome calculations and mistakes.
While deciding the rate of interest for the depositor, certain factors are considered. Some of them are
Tenure is the duration for which you invest the money in a recurring deposit. 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.
Banks and other NBFCs provide higher rates of interest to senior citizens. The rates may range from 0.50% to 0.75% additional interest over the regular deposit rates for general citizens. However, the minimum age criteria for senior citizens may vary as per the provider.
Current Economic Environment
Banks and other financial institutions that provide recurring deposits schemes keep on updating their interest rates with reference to the changes in the economic conditions. The rates change due to various reasons such as – change in repo rate by the RBI, inflation, and so on. Hence, the prevailing conditions do play a vital role in evaluating RD rates.
Banks & Financial Institutions
One of the important factors that have the potential to immensely affect the maturity amount one may get. As it is clear that RD is provided by the banks and financial institutions, investing in a bank RD scheme is considered as a safer investment option. Individuals can also invest in a company recurring deposit rated but it is imperative to check the credit ratings before they opt to invest in a company recurring deposit. Company recurring deposits that have high or better credit ratings like FAAA, FAA are considered to be safer than other corporate recurring deposits.
Ques. Does the recurring deposit calculator of Kotak Mahindra bank show accurate results?
Ans. Yes, it has been programmed in such a way that it reflects the accurate results. However, it depends on the values you enter, so make sure you enter the values correctly.
Ques. Which formula should we use to calculate simple interest?
Ans. The formula for simple interest calculation is I = P x R x T where ‘I’ stands for Interest, ‘p’ stands for principal, ‘r’ stands for annual interest rate, and ‘t’ stands for the tenure of the deposit.
Ques. In the case of RDs, when is simple interest calculated?
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 June end. Following that, the interest will be compounded as the new quarter starts.
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