GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Quarterly compounding
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Simple interest calculated monthly basis
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Simple interest on monthly product basis
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Interest calculated on daily product basis
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Detailed explanation-1: -Yes, the interest paid on RD is compounded quarterly. What is the current interest rate applicable on the RD account? The current rate of interest applicable on the RD account ranges from 4%-6.5%.
Detailed explanation-2: -Yes, you can calculate returns from your RD investment by using the formula A = P x (1 + r/100)^nt, where, A = Total amount by the end of the period. P = Principal amount from which compounding will start.
Detailed explanation-3: -The interest on RD is compounded on quarterly basis. Most banks offer senior citizens an additional interest rate of 0.50% to 0.80%, as compared to regular recurring deposits.
Detailed explanation-4: -Cumulative deposits (quarterly compounded) allow interests to be paid at maturity and Fixed Deposits (interest non-cumulated) allow interests to be paid monthly or quarterly, as per your choice. Cumulative deposits enable you to earn more as the interest income is reinvested.