RD Calculator

Calculate RD maturity value, total deposited, and interest earned. Quarterly compounding.

📅 What is a Recurring Deposit (RD)?

A Recurring Deposit (RD) is a type of savings instrument offered by banks and post offices that allows you to deposit a fixed amount every month for a predetermined tenure and earn a fixed interest rate. At the end of the tenure (maturity), you receive the total amount deposited plus all accumulated interest.

RDs are ideal for salaried individuals who cannot invest a lump sum but can commit to saving a fixed amount each month. They combine the discipline of systematic savings with the guaranteed, risk-free returns of a fixed deposit. RD interest rates in India typically range from 5% to 8% per annum and are revised periodically by banks.

Indian banks compound RD interest quarterly, meaning interest is calculated every three months on the outstanding balance. This calculator uses the standard quarterly compounding method used by all scheduled commercial banks in India.

📐 RD Maturity Formula

M = Σ P × (1 + r)^q(m)

M = Maturity amount

P = Monthly deposit amount

r = Quarterly interest rate = Annual rate ÷ 4 ÷ 100

q(m) = Quarters remaining for deposit in month m = (total months − m + 1) ÷ 3

Each monthly deposit earns interest for a different number of quarters - the first deposit earns for all quarters in the tenure, while the last deposit earns for only a fraction of a quarter. The total maturity value is the sum of each deposit compounded for its remaining period.

📖 How to Use This Calculator

Steps

Enter your monthly deposit amount - the fixed amount you will deposit each month.

Enter the annual interest rate - check your bank's current RD rate for your chosen tenure.

Select the tenure and click Calculate to see maturity value, total deposited, and interest earned.

💡 Example Calculations

Example 1 - ₹5,000/month for 3 years at 7%

Monthly deposit = ₹5,000 | Annual rate = 7% | Quarterly rate r = 7/4/100 = 0.0175

Total months = 36 | Total deposited = ₹5,000 × 36 = ₹1,80,000

Maturity ≈ ₹2,00,457 | Interest earned ≈ ₹20,457

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Example 2 - ₹10,000/month for 5 years at 7.5%

Total deposited = ₹10,000 × 60 = ₹6,00,000

Maturity ≈ ₹7,23,600 | Interest earned ≈ ₹1,23,600

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❓ Frequently Asked Questions

How is RD different from FD?+

An FD (Fixed Deposit) requires a lump sum investment upfront. An RD accepts smaller monthly deposits over time. Both earn fixed interest with quarterly compounding. RD rates are slightly lower than FD rates for the same tenure. FDs are suitable if you have a lump sum to invest; RDs are suitable for regular monthly savings. Both are low-risk and insured up to ₹5 lakhs per depositor per bank under DICGC.

Can I withdraw from an RD before maturity?+

Yes, premature withdrawal is allowed at most banks, but with a penalty of 0.5-1% on the applicable interest rate. If you break an RD in the 7th month of a 12-month scheme, interest is paid at the rate for 6-month deposits minus the penalty. Some banks do not allow premature closure in the first 3 months.

How does an RD compare to a SIP in a mutual fund?+

Both involve fixed monthly contributions. An RD gives guaranteed returns (currently 6.5-7.5% pa) with zero risk. An SIP in an equity mutual fund offers potentially higher returns (10-15% historical average) but with market risk and no guarantees. RD is ideal for short-term goals (1-3 years); SIP suits long-term wealth building (5+ years).

Which bank offers the highest RD interest rate?+

RD rates vary by bank and tenure. Small finance banks (Jana, AU, Equitas) typically offer 7.5-9% pa. Large public sector banks (SBI, PNB) offer 6.5-7.5%. Private banks (HDFC, ICICI, Axis) offer 7-7.75%. Senior citizens get 0.25-0.5% extra. Compare rates on bank websites for your specific tenure before opening an RD.

Is RD interest taxable?+

Yes. Interest earned on RDs is fully taxable as "Income from Other Sources" at your applicable income tax slab rate. Banks deduct TDS at 10% if total interest (RD + FD combined at the same bank) exceeds ₹40,000 per year (₹50,000 for senior citizens). If your total income is below the taxable limit, submit Form 15G/15H to avoid TDS.

Can I withdraw an RD before maturity?+

Yes, most banks allow premature withdrawal of an RD, but with a penalty of 1%–2% on the interest rate. For example, if your RD rate is 7% and you withdraw early, interest may be calculated at 6%–6.5%. The penalty is on the interest rate, not on the principal. Some banks do not allow premature closure of RDs before a minimum period (e.g., 3 months). Check your bank's terms before opening.

What is the minimum deposit for an RD?+

Most banks have a minimum monthly RD deposit of ₹100 to ₹500. Post Office RDs (PORD) have a minimum of ₹100 per month. There is no upper limit. Post Office RDs currently offer 6.7% per annum (Q4 FY2025-26, subject to revision). Most private and public sector banks offer RD rates in the 5.5%–7.5% range depending on tenure and depositor category.

How much will ₹5,000/month RD for 3 years grow to at 7%?+

At 7% per annum (compounded quarterly), a monthly RD of ₹5,000 for 3 years (36 months) grows to approximately ₹2,00,400. Total deposits = ₹1,80,000; interest earned ≈ ₹20,400. This shows how regular small deposits compound over time. Use this calculator to try different monthly amounts, rates, and tenures to plan your savings goal.

Is RD better than SIP for safe returns?+

RD guarantees the stated interest rate and is insured up to ₹5L under DICGC - ideal for capital preservation goals within 1–3 years. SIP in equity mutual funds has historically delivered higher returns (10–14% CAGR over 10+ years) but carries market risk with no guaranteed return. Choose RD when you cannot afford to lose principal. Choose SIP for long-term wealth creation (5+ year horizon) where short-term volatility is acceptable.

What is the difference between an RD and a SIP?+

A Recurring Deposit (RD) is a bank product with a guaranteed fixed interest rate, making it risk-free and predictable. A SIP (Systematic Investment Plan) in a mutual fund has market-linked returns - potentially higher (10-15% historically) but with risk. RDs suit conservative investors; SIPs suit those comfortable with market volatility seeking higher long-term growth.

What happens if I miss an RD instalment?+

If you miss an RD instalment, most banks charge a penalty - typically ₹1.5 to ₹2 per ₹100 of the missed instalment per month of default. After 3–4 consecutive missed instalments, the bank may close the RD prematurely and pay interest at the applicable penalty rate. To avoid missing payments, link your RD to a savings account with auto-debit enabled. Post Office RDs allow a grace period of one month for late payments without penalty.

🔗 Related Calculators

How is RD different from FD?

An FD requires a lump sum upfront. An RD accepts smaller monthly deposits over time. Both use quarterly compounding. RD rates are slightly lower than FD for the same tenure. FDs suit those with a lump sum to invest; RDs suit regular monthly savings. Both are insured up to ₹5 lakh per depositor per bank under DICGC.

Is RD interest taxable?

Yes. RD interest is taxable as 'Income from Other Sources' at your income tax slab rate. Banks deduct TDS at 10% if total interest (RD + FD combined at the same bank) exceeds ₹40,000 per year (₹50,000 for senior citizens). Submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.

Can I withdraw an RD before maturity?

Yes, most banks allow premature closure of an RD with a penalty of 1–2% on the interest rate. For example, if your RD rate is 7% and you withdraw early, interest is calculated at 6–6.5%. Some banks require a minimum holding period. Check your bank's terms before opening.

What is the minimum deposit for an RD?

Most banks have a minimum monthly RD deposit of ₹100 to ₹500. Post Office RDs (PORD) have a minimum of ₹100 per month. Post Office RDs currently offer 6.7% p.a. (subject to revision). Most banks offer RD rates in the 5.5–7.5% range depending on tenure and depositor category.

How much will I get from an RD of ₹5,000 per month for 2 years at 7%?

At 7% with quarterly compounding, a monthly deposit of ₹5,000 for 24 months (2 years) gives a maturity value of approximately ₹1,28,891. Total deposited = ₹1,20,000. Interest earned ≈ ₹8,891. RD interest is slightly lower than FD for the same rate because deposits are spread monthly rather than invested as a lump sum from day one.

Can I withdraw from an RD before maturity?

How does an RD compare to a SIP in a mutual fund?

Which bank offers the highest RD interest rate?

📌 Quick Tips

💡RD uses quarterly compounding - your effective annual return is slightly higher than the stated rate.

💡RD interest is taxable as income - TDS applies if total interest exceeds ₹40,000 per year (₹50,000 for seniors).

💡Unlike FD, RD lets you save in small monthly amounts while still earning fixed returns.

💡Results are rounded to a practical number of decimal places for everyday use.

💡Use this calculator as a starting point, then consult a professional for high-stakes decisions.