Monthly investment

₹

Rate of interest (p.a)

%

Time period

Years

Invested amount | ₹ |

Est. returns | ₹ |

Total value | ₹ |

Total investment

Total interest

RD ALTERNATIVE

Union Bank of India is one of the largest government-owned banks in India. It provides an array of RD schemes with attractive rates of up to 5.90%. One can check the maturity value of their UBI RD with the help of the Union Bank RD Calculator online. The RD calculator computes the maturity value quickly; all you have to do is provide all the values correctly such as monthly investment amount, tenure, and the interest rate.

Recurring deposits are very easy to open and one doesn’t need a hefty amount to book an RD with Union Bank of India. The minimum amount needed to open an RD account with UBI starts from as low as Rs. 100.

Tenure |
General Citizen RD Rates |
Senior Citizen RD Rates |

181 days – 364 days | 4.50% | 4.50% |

1 year | 5.25% | 5.25% |

1 year 1 day – 2 years | 5.30% | 5.30% |

2 years 1 day – 3 years | 5.50% | 5.50% |

3 years 1 day – 5 years | 5.55% | 5.55% |

5 years 1 day – 10 years | 5.60% | 5.60% |

Read more about Union Bank of India Recurring Deposit Rates Benefits and Tax Implication

Interest on a recurring deposit account with Union Bank is compounded every quarter. This implies that the deposit holders will earn interest every 3rd month from the time of deposit and 4 times in a year.

Individuals holding an RD account can use the RD calculator of Union Bank to determine their returns. The formula for compound interest used by this calculator is mentioned below –

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

Here,

- M denotes the maturity amount.
- n denotes the number of quarters within the deposit period.
- R denotes the amount deposited in the RD.
- i denotes the rate of interest divided by 400 (because of 4 quarters).

Suppose Laxman wants to deposit Rs.4500 in the month of January for a two years tenure at 7% rate of interest, then by using compound interest formula provided above, we get:

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

**M= Rs. 116,189**

With Union Bank recurring deposit calculators having your back, you no longer have to go through intricate calculations.

While deciding the rate of interest for the depositor, certain factors are considered. Some of them are

**Tenure of the deposit: **One of the main factors that affect the RD interest rates is the deposit tenure or maturity period. Longer periods offer higher rates and vice versa. From the table listed above, the rate for depositing for 1 year 1 day to 443 days is 5.75% while that of 555 days is 5.90%.

**Depositor’s age**

The second most important factor that impacts the rates of interest is the depositor’s age. Senior citizens are provided with 0.5% additional interest over general citizen rates

**Inflation**

Inflation affects the net return on investment from a recurring deposit. For instance, if the RD interest rate per annum is 8% and the inflation is 6% then the effective interest you have earned on your deposits is just 2%.

**Repo rate**

With the cut in repo rate, banks tend to reduce their fixed deposit rates which means that the new deposits you make earn a lower rate and it means lower returns. However, the deposits booked at a higher rate continue to give the higher return till the time of maturity.

**Reverse repo rate**

The reverse repo rate is one of the instruments of the monetary policies of the Reserve Bank of India (RBI). The RBI borrows money from the commercial banks (like IOB) and pays them interest as per the reverse repo rate. If this rate is high, banks will earn more interest on the deposits and, in turn, increase the rate of interest on their term deposits (like recurring deposits).

- Simple to use and provides accurate results instantly
- Generates accurate results without any miscalculations
- It can be used multiple times, by adjusting the variables to determine the maturity value of the deposit.

**Ques. **What is the highest rate offered by Union Bank of India on recurring deposits?

**Ans. **One can earn a maximum interest of 5.90% on Union Bank of India recurring deposit.

**Ques**. In the case of RDs, when is simple interest calculated?

**Ans**. If you are opening a recurring deposit in the middle of a current 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**. 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.

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