Recurring deposit

For detailed explanation, please refer Reinvestment Deposit Scheme

The total interest receivable from a recurring deposit is calculated as below

• Identify the compounding period

  • Quarterly has 4 times compounding in a year,
    we have to compound the interest for every 3 months
  • HalfYearly has 2 times compounding in a year,
    we have to compound the interest for every 6 months
  • Monthly has 12 times compounding in a year,
    we have to compound the interest for every 12 months
  • Yearly has 1 time compounding in a year,
    we have to compound the interest for every 1 month

Calculate the simple interest using regular formula (pti/100) for each month and add the cumulative interest to the invested amount based on the compounding period.

where,
i - Rate of Interest(%)
t - Total number of periods(months)
p - Monthly recurring amount(currency)

Below is an example for quarterly compounding for a monthly recurring deposit of 1000 at 6% annual interest