Compound Interest and Impact of Compounding frequency

 

Compound Interest and Impact of Compounding frequency

Most banks that offer Recurring Deposit usually compound interest on a quarterly basis. Compound interest is interest that is added to the principal amount so that from then on, the interest that has been added also earns interest. This addition of interest to the principal is called compounding.

The following formula gives you the total amount one will get if compounding is done:

Maturity Value of the Recurring Deposits - based on Quarterly Compounding)

M = R [(1+i) ⁿ – 1]

--------------------

1- (1+i) ^-1/3

Where,

M = Maturity value

R = Monthly installment

n = Number of quarters

i = Rate of interest/400

Invest Rs 150000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

There are a lot of mutual funds that customers can choose from but some of the best Tax Saver mutual funds in India right now are:

Top 10 Tax Saver Mutual Funds to invest in India for 2016 or Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

It must be remembered that this list is not set in stone as improvement or reduction in performance of the mutual fund could change the position of these funds among the top 10 tax saving mutual funds in India.

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