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RD Calculator

A recurring deposit lets you save a fixed amount every month at a fixed interest rate. Enter your monthly deposit, the bank's RD rate and the tenure to see the maturity amount, the interest earned and the balance at the end of each year.

How to use this calculator

  1. Enter the amount you will deposit every month.
  2. Enter the RD interest rate your bank or post office offers for that tenure.
  3. Enter the tenure in years and months. Most banks accept 6 months to 10 years.
  4. Read the maturity value, then check the year-by-year table.

Formula

M = P × ((1 + i)^n − 1) ÷ (1 − (1 + i)^(−1/3))

M
maturity amount
P
monthly deposit
i
quarterly rate = annual rate ÷ 400
n
number of quarters in the tenure

This is the same as adding up every monthly instalment compounded quarterly for the months it stays deposited.

Worked example

₹5,000 deposited every month for 3 years at 7% a year.

  1. Instalments36 × ₹5,000 = ₹1,80,000
  2. Quarterly rate7 ÷ 400 = 0.0175
  3. Quarters12

The RD matures at about ₹2,00,686, so you earn about ₹20,686 in interest before tax.

How RD interest is calculated

Banks compound RD interest every quarter, but you deposit every month. So each instalment earns interest only for the time it has been in the account: the first deposit earns for the full tenure, the last one for just one month. The maturity amount is the sum of all those instalments with their interest.

That is why an RD earns less interest than putting the whole amount in an FD on day one at the same rate. Only the first instalment is invested for the full period.

RD or SIP for monthly saving?

An RD gives a guaranteed, fixed return and suits money you need on a known date, such as a fee payment or a trip. A SIP in a mutual fund can earn more over five years or longer but its value goes up and down. Many people use an RD for goals under three years and a SIP for longer ones.

Post office RDs run for five years at a rate set by the government each quarter. Bank RDs are more flexible on tenure. Deposits in scheduled banks are insured by DICGC up to ₹5 lakh per depositor per bank.

Tax on RD interest

RD interest is added to your income and taxed at your slab rate every year, even though you receive it only at maturity. Banks deduct TDS when your total interest from that bank in a year crosses the threshold, and you can submit Form 15G or 15H if your income is below the taxable limit.

Things to keep in mind

  • Missing an instalment usually means a small penalty and can delay maturity; check your bank's rules.
  • Closing an RD early usually means a lower rate, often 0.5% to 1% less than the agreed one.
  • Senior citizens are generally offered a higher rate; enter that rate directly if it applies.

Frequently asked questions

How much will I get on an RD of ₹1,000 a month for 1 year?

At 7% a year with quarterly compounding, ₹1,000 a month for 12 months matures at about ₹12,462: ₹12,000 deposited and about ₹462 interest. Enter your bank's rate above for the exact figure.

Is RD interest compounded monthly or quarterly?

Quarterly, at almost all Indian banks and at the post office. You deposit monthly, so each instalment compounds quarterly only for the time it is in the account.

Which is better, RD or FD?

If you already have the money, an FD earns more because the whole amount earns interest from the start. An RD is for building savings from your monthly income when you do not have a lump sum.

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