What Happens If You Miss to Pay the Recurring Deposit Due on Time?

Using an online RD calculator makes the job ten times easier. It provides you with accurate results through minimal details.

A recurring deposit or RD is an investment plan that enables you to save money easily through monthly instalments each month. These instalments are known as recurring deposits due. This term deposit is a great option for anyone who cannot save large chunks every month or is generally bad at saving. If you wish to know the interest that you will earn for investing a certain amount over a certain period of time before investing, you can calculate your estimated returns with the help of a recurring deposit calculator.

What is a Recurring Deposit Calculator?

A Recurring Deposit calculator or an RD calculator calculates the interest applicable to your RD for you. All you have to do is provide information about your monthly investment, the rate of interest p.a., and the time period that you have opted for the scheme. And it gives you instant results about the estimated returns on your investment.

Formula to calculate RD Interest Rates

Mentioned below is the formula used by this calculator to calculate your estimated returns:

A=P*(1+R/N)^(Nt)

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Where,

A stands for maturity amount,

P stands for RD instalment every month,

R stands for RD interest rate,

N stands for compounding frequency,

And, t stands for the tenure of the scheme

For instance, if you invest INR 15,000 every month at the interest rate of 5% p.a. for a tenure of 2 years, the estimated returns on this RD investment will be INR 20,566.

Benefits of using an RD interest calculator

If you wish to calculate the interest on your RD, you can do so with the help of the formula mentioned above. However, calculating it with the help of an online RD calculator can make the process convenient for you. The benefits of using an online calculator are mentioned below:

1. Accuracy

Calculating something manually always leaves some space for human error. Or it will take you at least 2-3 times to calculate to be certain that you have the correct answer. Using an online RD calculator makes the job ten times easier. It provides you with accurate results through minimal details.

2. Quick Results

Manually calculating the returns will take you a lot more time than getting technology to do it. You can find out the estimated returns on your investment within a matter of a few seconds with the help of this calculator.

How to use an online RD calculator?

Following are the steps to use an online RD calculator:

• Google RD calculator, or you can also directly visit https://navi.com/calculator/rd-calculator
• Once you have successfully opened the calculator, you will land \\\\\\\\\\\ on a page that will ask for the necessary number to calculate estimated returns.
• These options will be monthly investment, rate of interest, and time period. Type in the details in the given space or drag the bars given below each option to the right digits.
• Once you have entered the details, you will get the results in front of you. It will display invested amount, est. returns, and total value for you. Estimated returns are how much you have earned through the recurring deposit interest rates.

What happens when you fail to pay a Recurring Deposit due on time?

No one would want to miss the monthly deposit on a savings scheme that offers them assured returns; however, sometimes, a financial constraint can leave you helpless. Let’s have a look at what will happen if you skip your recurring deposit due.

When you miss paying the deposit due for a month

When you miss paying the recurring deposit due for a month, you will be charged a fine from the bank. However, this penalty and its severity depend from bank to bank. It is, therefore, recommended to understand the penalty charges and other terms and conditions of the scheme before you apply for it.

When you miss paying the deposit due for several months

While the bank may not take one miss of the deposit due seriously and let the scheme continue as it was running, several misses on the payments can have consequences. They can permanently deactivate the RD account till the time you clear off all the dues, along with paying the fine for each month. If they put your RD account on hold, you can lose money that you could have earned through RD interest rates in the meantime.

How to manage your Recurring Deposits better to avoid a penalty?

Here are a few tips on how you avoid paying penalties by managing your deposit dues better:

 1. Put the recurring deposit formula to use:

Calculate with the help of the RD interest rate formula, or use the online calculator to plan your finances better. Calculating it beforehand will put you in a position to visualize your finances post signing up for the scheme. Knowing the estimated returns will also motivate you to keep investing in the scheme timely.

 2. Set up automatic payments:

If you are someone who intends to pay the instalments on time, but it keeps slipping out of your head, or you stay so busy that you keep procrastinating the task, you can consider setting up automatic payments. Let technology complete this task for you. This will ensure that you do not miss any payments and end up paying a penalty that could have been easily avoided.

3. Opt for a flexible scheme:

Just as you have the option to calculate your returns with an RD calculator in India, you also get the option to choose a flexible scheme before signing up. Flexible RD schemes are the ones that will not charge you a fine for not paying the deposit due for a month or so.

Summary

Recurring Deposit is a great scheme for someone who is looking for a safe investment scheme. It can be great for people who want to start saving. This scheme makes saving easy and uncomplicated. All you have to do is pay your recurring deposit due each month on time, and you can get some promising returns on it in a few years. These returns can be calculated with the help of a recurring deposit calculator. This calculator is simple to use and gives you accurate results rapidly.