Everybody wishes to create a sizeable savings corpus; however, only a few succeed. Most of the failures result because of unsustainable savings habits. You can follow the old-school approach –  make sacrifices after making significant cuts in your budget and adhere to it only till you can.

Remember, consistency is the key, and the approach should be sustainable. This is why savings schemes are becoming popular by the day. You do not need to do anything demanding, just deposit a fixed amount in them every month, and you get sizeable wealth at the end of the investment tenure.

One such saving scheme is a recurring deposit. We will be telling you more about the scheme and a tool you can use beforehand called an RD calculator to ensure you meet your investment objectives.

What is a Recurring Deposit Scheme?

The leading banks in India and Non-Banking Finance Companies offer recurring deposits. It is a savings scheme designed to help people generate a significant savings fund by investing a defined amount regularly.

This scheme is mostly chosen by investors who wish to get guaranteed returns. A recurring deposit scheme offers a fixed interest rate throughout the year. This fixed interest rate helps multiply your investment to support wealth creation.

So, if you are thinking of investing in a recurring deposit scheme, you must definitely use an RD calculator.

Here’s What an RD Calculator Does

An RD calculator provides you with an estimate of the amount you will be accumulating in your recurring deposit account on maturity. To use an RD calculator, you are required to enter the investment amount, investment frequency, rate of interest and investment tenure. While the rate of interest is also determined and offered by the bank, you can decide the other variables as per your financial goals and preferences.

Here are a Few Benefits of an RD Calculator:

• Helps you Decide the Important Investment Variables:

  Your returns depend on the investment value, investment tenure and rate of interest. While it is not possible to decide the rate of interest, it is possible to decide the investment value and investment tenure – this is what makes a recurring deposit scheme one of the most flexible savings instruments out there.

  Nevertheless, deciding these variables can get confusing. However, you can use an RD calculator to make decision-making easy for you.

  Here is how.

  You can begin by experimenting with the investment amount. Put any investment amount and investment tenure. Now use the calculator to generate the maturity value. Once the amount has been displayed on your screen, check if it is what you were hoping for or if it aligns with your financial goals.

   

• Supports your Financial Planning:

  A lot of your life’s significant moments depend on your savings. Consequently, creating a savings fund is an essential part of your financial planning. If you are depending on a recurring deposit scheme to create savings, knowing the amount you will be getting at the end of your tenure would aid your financial planning. You can determine how much more you would be required to save, apart from your recurring deposit scheme, to reach your savings goal.

   

• Saves you From Complex Calculation:

  There is a manual way of estimating the maturity amount of your recurring deposit account. But it involves complex calculations. So, if you are someone who is not a fan of complex and hassling calculations, you can give this method a pass and rather use an RD calculator to compute your returns.

   

• Saves Time:

  As mentioned above, the manual calculation of computing RD returns can be complex. In addition, it can be time-consuming as well. So, if you are someone who is running against the clock and prefers focusing on other key aspects of investment planning, feel free to use an RD calculator. An RD calculator is simple to use and gives you returns in a jiffy. You would be required to fill in limited fields for the RD calculator to work and provide you results in a matter of seconds.

The Bottom Line

Now that you know the several benefits of using an RD calculator, we take you will consider using the RD calculator before you proceed with your investment in RD. The tool is free to use. So, there is no good enough reason for you to skip using it when it can offer you a handful of benefits. There are other savings schemes you can also consider. If you prefer investment security and invest just once, a fixed deposit scheme is ideal for you. A fixed deposit interest calculator can be used to compute returns.