Recurring Deposit Calculator
About this calculator
A recurring deposit (RD) lets you save a fixed amount every month for a set period and earn a fixed rate of interest on it, much like a fixed deposit that you build up gradually. This RD calculator shows what you will receive at maturity, how much of that is your own money and how much is interest.
It follows the method Indian banks use: interest is compounded quarterly, and each monthly instalment earns interest only from the month it is deposited. Use the rate comparison table under the result to see how a half-percent difference in rate changes your maturity amount over your chosen tenure.
How to use it
- Enter the monthly deposit you plan to make, for example 10,000.
- Enter the annual interest rate your bank offers. Check the bank's current RD rate for your tenure.
- Choose the tenure in years or months. Most banks accept 6 months to 10 years.
- Read the maturity value, total deposited and interest earned, then scan the comparison table to see the same deposit at other rates.
The RD maturity formula
Each instalment grows from the month it is paid until maturity, compounded quarterly:
Maturity = Σ P × (1 + r/400)k/3, for k = 1 to n
Here P is the monthly deposit, r is the annual rate in percent and n is the number of months. The first instalment earns interest for n months (k = n), the last one for a single month (k = 1). Interest earned is maturity minus P × n.
Worked example
₹10,000 a month for 1 year at 7% p.a.
| Item | Amount |
|---|---|
| Total deposited (10,000 × 12) | ₹1,20,000 |
| Maturity amount | ₹1,24,621 |
| Interest earned | ₹4,621 |
Over 5 years at the same rate, ₹10,000 a month grows to about ₹7,19,328 on a deposit of ₹6,00,000.
Tips and common mistakes
- Banks round the rate and sometimes the compounding date, so your passbook figure can differ from the calculator by a few rupees.
- Senior citizens usually get an extra 0.25% to 0.50%. Enter the higher rate if it applies to you.
- Missing an instalment normally attracts a small penalty per hundred rupees, and the maturity value drops. Set up an auto-debit instead.
- RD interest is taxable as per your slab, and banks may deduct TDS once interest crosses the annual threshold. Check the current limit with your bank.
Frequently asked questions
How is RD interest calculated?
Indian banks compound RD interest quarterly. Every monthly instalment earns interest from the month it is deposited until maturity, and the total of all instalments plus their interest is paid out at the end of the tenure.
What is the minimum and maximum RD tenure?
Most banks and post offices offer RDs from 6 months up to 10 years. Post Office RDs run for a fixed 5 years. Minimum monthly deposit is often 100 to 500 rupees depending on the bank.
Is RD better than an FD?
An FD suits a lump sum you already have. An RD suits regular savings from monthly income. Rates are often similar, but because RD instalments are deposited gradually, the effective return on the total amount is spread over a shorter average period.
Is RD interest taxable?
Yes. Interest is added to your income and taxed at your slab rate. Banks may deduct TDS when interest crosses the annual limit, and you can submit Form 15G or 15H if eligible to avoid TDS.
Can I close an RD before maturity?
Yes, most banks allow premature closure, usually with a penalty of about 0.5% to 1% on the interest rate. Some banks do not allow closure within the first few months.
Why is my bank's maturity value slightly different?
Banks may use different day counts, round each quarter's interest, or credit interest on a specific date. The calculator gives a close estimate, so treat the bank's statement as final.