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RD ALTERNATIVE

The Post office RD calculator enables depositors to quickly calculate their returns or maturity amount generated from Recurring Deposit accounts with the post office. With this online tool, individuals only need to enter the deposit amount, rate of interest, and tenure for the calculation of their maturity amount. The calculator shows the results instantly and is free to use.

India Post, operated by the Department of Posts, was established in 1854 and is headquartered in New Delhi. The organization has the most widely spread postal distribution system in the world with more than 1.55 Lakh post offices. In 2018, the India Post Payments Bank (IPPB) was launched by the Government of India. It is also operated by the Department of Posts and is a government-owned public sector bank.

India Post offers banking and remittance products and schemes. One of these is the National Savings Recurring Deposit Account scheme. Those opening an RD with any post office can use the RD calculator of the post office to assess their maturity amount.

The rate of interest on a National Savings Recurring Deposit Account is 5.8% with effect from 1st April 2020.

Read about: Post Office Recurring Deposit Rates

- A National Savings Recurring Deposit Account can be opened even by minors aged 10 years or above. The minimum amount required to open an RD account with the post office is Rs.100. Account-holders can deposit in multiples of Rs.10 each month with no ceiling.
- The maximum period for post office RD accounts is 5 years, which can be further extended to 5 years by making a formal application.
- India Post also offers discounts for advance deposits – a rebate of Rs.40 is offered for 12 deposits and Rs.10 for 6 deposits.
- Post office RD accounts also allow depositors to avail of a loan after the completion of 1 year. Borrowers can avail of 50% of the available balance.
- They can repay the loan along with interest as a lump sum amount at any time during the RD tenure.
- Interest on a post office recurring deposit is compounded every quarter. Account-holders will earn interest on their deposits every 3 months, which totals to 4 times in a year.
- Those holding a National Savings Recurring Deposit Account can use a post office RD calculator 2022 to assess their maturity amount.

The formula used to calculate returns on a recurring deposit is –

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

In the above formula –

- R is the amount deposited per month.
- n is the number of quarters in the tenure.
- i is the rate of interest divided by 400 (for 4 quarters in a year).
- M is the maturity amount.

*The following example can explain the above formula better – *

*Mrs. Banerjee lives in Kolkata and opens a National Savings Recurring Deposit Account with a monthly deposit of Rs.7,000 for 5 years at the prevailing rate of interest of 5.8%.*

Here,

- R = Rs.7,000.
- i = 0.0145 (5.8 / 400).
- n = 20 (5 years x 4).

When the figures are placed in the formula –

M = 7,000 x {(1 + 20) x 16 – 1} / 1- (1 + 0.0145) (-1/3)

Therefore, M = Rs.4,87,878.

Hence, Mrs. Banerjee earns Rs.4,87,878 by depositing Rs.7,000 every month for 5 years at a 5.8% rate of interest.

Individuals can use a postal RD calculator to make such assessments easily. Manually calculating the maturity amount with the above formula can be time-consuming and subsequently lead to inaccuracies.

A Recurring Deposit calculator can save you a lot of time by making your calculations effortless. It is very easy to use and the results accurate if you put the values right. One can use the calculator by following the below-given steps:

- Enter the monthly investment amount. Alternatively, the slider can be adjusted to enter the value.
- Next is to enter the rate of interest applicable.
- The last step involves entering the time period of the RD.
- The post office RD interest calculator will display the total investment, total interest and the maturity value (principal+interest)

The earnings generated from the Post Office RD can be influenced by several factors, like –

**Yields on government securities**

The rate of interest on post office term deposits is dependent on yields from government securities (g-secs).

Such securities are issued both by the central and state governments. These are tradable instruments that are either short-term (like treasury bills) or long-term (government bonds).

As of 15th May 2020, the current yield on the 10-year government bond is 6.08%.

Few of the benefits of using a post office RD interest rate 2022 calculator are –

- Quick and hassle-free to use.
- Calculates results instantly.
- Displays accurate maturity value.
- Let’s individuals plan their deposit accordingly.

The post office recurring deposit calculator is, thus, an efficient online tool that individuals can use before opting for a National Savings Recurring Deposit Account. This will allow them to gauge their returns accurately and facilitate easy financial planning.