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RD ALTERNATIVE

It is crucial to make provisions for the future when the going is good. A recurring deposit scheme is an ideal avenue for that purpose. It allows steady accumulation of funds over time through monthly deposits coupled with the effect of compounding interest.

However, it is also essential to choose a trusted financial institution for opening an RD account. YES Bank fulfils that criterion and also provides lucrative interest rates on its recurring deposit scheme.

An individual can open an RD account with YES Bank for a minimum of 6 months and a maximum of 10 years. Moreover, with YES Bank’s convenient RD scheme, one can inculcate a disciplinary saving habit. Furthermore, prospective depositors can use a YES Bank RD calculator to maximise their returns from an RD account with YES Bank.

The YES Bank Recurring Deposit calculator is an online tool through which depositors can calculate the amount they can withdraw at maturity against the deposits they make. The calculator takes into account three variables – rate of interest, deposit amount, and maturity period.

Therefore, depositors can use the YES Bank RD calculator to calculate the deposit amount and maturity period that best suits their provisioning needs.

The recurring deposits interest rates by YES Bank for resident Indians as of 1st May 2020 are presented in the table below –

Tenure |
General Citizen Rates |
Senior Citizen Rates |

6 months | 5.50% | 6.00% |

9 months | 5.75% | 6.25% |

12 months | 6.50% | 7.00% |

15 months | 6.50% | 7.00% |

18 months | 6.50% | 7.00% |

21 months | 6.50% | 7.00% |

24 months | 6.50% | 7.00% |

27 months | 6.50% | 7.00% |

30 months | 6.50% | 7.00% |

33 months | 6.50% | 7.00% |

3 years to 10 years | 6.75% | 7.50% |

Read more about Yes Bank RD Interest Rates

The money deposited in a YES Bank RD account earns interest that is compounded every quarter. For example, if Gita opens an RD account with YES Bank on 1st May, the interest on her deposits would compound every 1st August, 1st November, 1st February, and 1st May. This would be routinely carried out up to the end of the maturity period.

Now, the maturity value on the RD is calculated based on the formula recognised industry-wide. It is also the formula on which the YES Bank RD calculator 2020 functions. The formula is –

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

In this RD formula, M stands for the maturity value, R denotes the deposit amount, n represents the maturity period (in terms of quarters), and i symbolises the rate of interest divided by (4×100).

*Example of RD maturity calculation: *

*Jhanvi, a widow aged 61 years, opened an RD account with YES Bank with an initial deposit of Rs.2500. She chose a lock-in period of 24 months for her deposits at an interest rate of 7.5%. *

When translated to the formula’s variables,

- i = 0.01875 [0.075 / 4],
- R = Rs. 2500, and
- n = 8 quarters [24 / 3]

Ergo, M = Rs. [2500 x {(1 + 8) x 8 – 1} / 1 – (1 + 0.01875) (-1/3)]

Or, M = Rs.64549.45

Therefore, Jhanvi would be able to withdraw Rs.64549 on maturity if she continues to deposit Rs.2500 per month for 24 months in her YES Bank RD account.

Prospective depositors can opt for the YES Bank RD rate calculator instead of resorting to manual calculation. The manual calculation might yield inaccurate maturity value owing to miscalculation.

The factors that influence the rate of interest on YES Bank Recurring Deposit are elucidated below –

**Age of the depositor**

If the depositor is aged above 60 years of age, i.e. a senior citizen, they are liable to earn an extra 0.50% interest on their deposits.

**Maturity period**

The maturity period plays a pivotal role in the determination of interest that would accrue on a specific RD account. For instance, there are two YES Bank RD depositors with the same monthly deposit sum. However, one account-holder has chosen a 12 month maturity period and another account-holder a 24 month maturity period. The latter will subsequently earn more interest on his deposits.

That is because, for a 12-month maturity period, the interest rate offered is 7% for general citizens and 7.5% for senior citizens. For a 24-month maturity period, the interest rate offered is 7.25% for general citizens and 7.75% for senior citizens.

**RBI rate**

RBI’s reverse repo rate is directly linked with the interest rate on YES Bank RDs. It is the rate at which the apex bank avails overnight loans from commercial banks. Therefore, a high reverse repo rate would mean a high-interest rate on RD and vice versa.

The advantages of using an RD Interest Calculator YES Bank are as follows –

- It is free of cost.
- It has simple accessibility.
- It can be used as a decision-making tool by prospective depositors.
- Individuals can use it to compare different maturity periods.

It is a healthy practice to calculate the returns in advance before undertaking any initiative concerning one’s disposable income to facilitate a well-informed decision.

**Ques**. Who can apply for an RD account?

**Ans**. Indian residents and Hindu Undivided Families (HUF) can open an RD account with Yes Bank.

**Ques**. Is Partial withdrawal allowed in Yes Bank Bank RD accounts?

**Ans**. No, Yes Bank Bank doesn’t allow Partial withdrawal of recurring deposit.

**Ques**. Is nomination facility provided by Yes Bank for RD account?

**Ans**. Yes, nomination facility is permissible on Yes Bank recurring deposit. One thing to note here is only one nominee per account is allowed.

**Ques**. What happens on the maturity of the YES RD account?

**Ans**. Once the Yes Bank RD matures, the principal amount and the accumulated interest can be transferred directly into the linked savings account. One more option is to invest the maturity amount in fixed deposits.

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