How to Easily Calculate RD Returns in Excel: Step-by-Step Guide

Every individual needs to get an estimation of their returns before starting an investment. A recurring deposit (RD) is one of the crucial investment options from which you will get higher returns by investing a fixed amount each month. Calculating your RD is crucial to estimating the amount you will receive.

Microsoft Excel can be used as an RD calculator, which saves you time and effort. Read this blog to learn about the RD calculation formula in Excel, its benefits, and the formula for calculating RD in Excel.

What is RD Calculation?

The RD calculator is an essential tool for understanding your potential returns, and it helps you plan your financials. This calculator simplifies complex calculation of RD returns and ensures investors to project their RD earnings over time. Microsoft Excel is also used to calculate RD returns. An RD calculator in Excel is beneficial for simplifying the maturity amount with its built-in financial functions.

Including numerous functions, Excel is a powerful tool, which addresses the issue of time-consuming processes and complexities of manual calculation of RDs. That is why the RD calculation formula in Excel must be understood by each RD investor.

Benefits of RD Calculation in Excel

Microsoft Excel’s RD interest calculation feature increases your investment growth and fosters financial planning. These are the following benefits you can avail after using Excel as an RD calculator:

• Ease in Calculation: Excel is often used to streamline difficult financial calculations. This also addresses the time-consuming process of manual calculation.
• Professional Value: Professionals also use Excel's RD calculator for managing client portfolios. It is also useful for bankers, accounting professionals, or financial advisors to predict anticipated returns for their clients.
• In-Built Functions: Excel also offers numerous built-in functions to make your RD calculations easier. These functions are future value (FV), present value (PV), payment (PMT), and interest rate (RATE). You can use these functions to calculate your RDs with parameters like deposit amounts, interest rates, frequency, and tenure.

Step-by-Step Process of Calculating RD in Excel

The RD calculation formula in Excel is simple and easy to understand. You can follow the below steps for calculating RD in Excel:

1. Open an Excel spreadsheet and insert a table with six columns with the following items:

• Monthly deposit: The amount you will invest each month.
• Rate of interest: Rate of interest offered on the RD scheme.
• Term: The total duration of the RD scheme.
• Total deposit: Total deposited amount on the RD. 
• Interest earned: Interest earned on the recurring deposit.
• Maturity value: Maturity value is what you will receive at the end of the tenure.

1. Enter the monthly deposit amount in the B2 cell, rate of interest in B3 cell, and the term in B4 cell.
2. Multiply the monthly deposit by the number of months in the RD tenure to calculate the total deposit. For instance, if your RD tenure is 36 months and the monthly deposit amount is ₹10,000, the total deposit would be ₹3,60,000. Enter the formula -  B2*B4 in cell B5.
3. Now, you have to calculate the interest earned on the RD using this formula: (Total Deposit * Rate of Interest * Term) / (12 * 100). Enter the formula - (B5B3B4)/(12*100) in cell B6.
4. To calculate the maturity value of the RD, you need to add the total deposit and interest earned. Enter the formula - B5+B6 in cell B7.
5. Now, you can calculate the total deposit, maturity value, and interest earned for different months or periods. Just copy the formulae in cells B5, B6, and B7 to the entire column.

Final Words

The RD calculation formula in Excel will allow you to streamline complex financial calculations. Businesses also use the Excel RD calculator for managing client portfolios. Using the RD interest calculation formula in Excel saves individuals time and effort compared to manual calculation.

Do you often use calculators to evaluate your investment returns? Download the Stable Money application to use different types of return calculators, including FD, EMI, and PPF.