RD Calculator
Calculate Recurring Deposit maturity amount and interest earned with live inputs
tuneAdjust Inputs
Maturity Amount
₹2,09,881
≈ 2.09 Lakh
Interest Earned
₹29,881
Growth: 16.6%
Total Deposited
₹1,80,000
85.8% of maturity
Interest Earned
₹29,881
14.2% of maturity
Investment Period
3 yrs (36 mo)
Monthly installments
Interest Rate
7% p.a.
Annual rate
Interest
14.2%
Deposited
₹1,80,000
Interest
₹29,881
functions RD Formula
M = R × [(1+r)ⁿ − 1] / r × (1+r)
R = Monthly deposit | r = Monthly rate | n = Months
Live Result Illustration
Visual summary — updates instantly as you enter values above
Real-Life Guide to Using the RD Calculator
Recurring deposit returns. Use the examples and checks below to turn the number into a practical decision.
When this calculator is useful
Suited to someone who wants to save a fixed amount every month — like ₹5,000 — through a bank recurring deposit and needs to know the maturity value at the end of a chosen tenure, typically 1 to 5 years.
For most people, the best way to use the RD Calculator is to try the real case first, then change one input at a time. That makes the trade-off visible. For example, with a loan calculator you can change tenure while keeping the same rate; with an investment calculator you can change return assumption while keeping the same monthly contribution; with a health, education or measurement calculator you can check how much one input changes the final category.
The result should answer a practical question: Can I afford this? How much should I save? Is this score enough? Is this measurement within range? What is the safer or cheaper option? If the output does not answer the decision clearly, adjust the inputs until the scenario matches your real situation.
lightbulb Real-Life Example
Three-year monthly recurring deposit: A young professional starts a ₹5,000/month RD for 3 years to save toward a car down payment, at an assumed 7% per annum.
1Using the standard bank RD formula with quarterly compounding, M = R × [(1+i)^n – 1] / (1 – (1+i)^(-1/3)) where i is the quarterly rate and n the number of quarters, a ₹5,000 monthly deposit for 3 years (36 months) works out to a maturity value of roughly ₹2,00,700, against a total deposit of ₹1,80,000 — an interest earning of about ₹20,700.
2Now change one input, such as rate, time, quantity, unit or score, and compare the new result with the first one.
An RD grows your money reliably for disciplined short-term saving, but the interest earned is modest compared to a lumpsum FD of the same final amount, since each instalment compounds for a different, shorter length of time.
Practical Advice
Use the RD Calculator as a planning tool, not just a number generator. Write down the inputs you used, because the final answer is meaningful only when you remember the assumptions behind it.
If the decision affects money, health, tax, safety, academics or legal compliance, keep a second check ready. That second check may be a bank quote, payslip, official rule, prescription, site measurement, mark sheet or invoice.
Common Mistakes
- Assuming RD interest is calculated the same simple way as adding up equal interest on every instalment, when banks actually compound RD interest quarterly on each instalment individually based on how long it has been deposited.
- Not noticing that the last month's deposit earns compound interest for only a very short period, so the final instalment contributes almost nothing to the interest, unlike the first instalment which earns interest for nearly the entire tenure.
- Missing an RD instalment and assuming there is no consequence, when most banks charge a penalty (commonly ₹1-1.5 per ₹100 per month for smaller RDs) on late or missed deposits.
- Comparing an RD's maturity value directly to a lumpsum FD of the same total deposited amount, when the two are not equivalent since RD money is deposited gradually and earns interest for a shorter average period than a lumpsum FD.
- Forgetting that RD interest, like FD interest, is fully taxable at slab rate and subject to TDS once total interest from a bank crosses ₹40,000 (₹50,000 for senior citizens) in a year.
How to Interpret Results
The maturity value reflects total deposits plus compounded interest on each instalment individually; use it to check whether a monthly saving habit at a given rate will meet a short-term goal like a vacation or a vehicle down payment, since RDs are typically for shorter, disciplined saving rather than long-term wealth building.
A good interpretation looks at both the main result and the supporting values. If a page shows totals, ratios, categories, schedules or warnings, read those together instead of focusing only on the biggest number.
RD Calculator FAQs
Useful answers for interpreting the output, avoiding mistakes and using the result responsibly.
What formula does the RD calculator actually use?
Banks generally compute RD maturity using compound interest applied quarterly to each monthly instalment based on how long it remains deposited, commonly approximated as M = R × [(1+i)^n – 1] / (1 – (1+i)^(-1/3)), where R is the monthly instalment, i is the quarterly interest rate, and n is the total number of quarters.
Why is RD interest lower than FD interest for the same total amount and rate?
Because RD money is deposited gradually over the tenure rather than all at once, the average amount actually earning interest over the period is much lower than the final total, so total interest earned is less than an equivalent lumpsum FD at the same rate.
Does the interest rate stay fixed for the whole RD tenure?
Yes, for a standard bank RD the rate is fixed at the time of opening for the entire chosen tenure, unlike a savings account where the rate can change; only new RDs opened later would get a different prevailing rate.
What if I miss a monthly instalment?
Most banks charge a small penalty per missed or delayed instalment (commonly a per-₹100 monthly charge) and may reduce the effective maturity value; some banks also allow only a limited number of missed instalments before the RD is closed.
Can I withdraw my RD before maturity?
Yes, but premature closure usually pays interest at a lower rate corresponding to the actual period the RD ran (similar to FD rules) rather than the originally booked rate, along with a possible penalty.
Is RD interest taxed differently from FD interest?
No, RD interest is taxed the same way as FD interest — added to your total income and taxed at your slab rate, with TDS deducted by the bank once total interest crosses ₹40,000 (₹50,000 for senior citizens) in a financial year across that bank.
Why does my bank's RD maturity certificate show a slightly different figure than the calculator?
Banks may use slightly different day-count conventions or round interest at each compounding step differently, so small variations of a few hundred rupees between a formula-based calculator and the actual bank statement are normal.
Is RD better than a SIP in a mutual fund for the same monthly amount?
RD gives a fixed, contractually guaranteed rate suitable for short-term, low-risk goals, while a SIP in an equity fund carries market risk but has historically offered higher long-term returns — the right choice depends on your goal's time horizon and your comfort with fluctuation.
Types of Recurring Deposits
Choose the RD variant that matches your residency status, goal horizon, and risk appetite
🏦
Bank RD
Most common, insured by DICGC up to ₹5 lakh per bank. Tenures from 6 months to 10 years. Most banks allow online RD booking via net banking or mobile app.
Most Common
📮
Post Office RD
Government-backed with sovereign guarantee. 5-year term, 6.7% p.a. (current). ₹100 minimum per month. Can be extended in blocks of 5 years after maturity.
Sovereign Safe
🏢
Corporate / NBFC RD
Higher rates (0.5–2% above banks), but no DICGC cover. Only invest in highly rated (AAA) corporates. Always verify on the RBI-registered NBFC list before investing.
Higher Risk
🌍
NRE RD
For NRIs, Indian rupee-denominated, fully repatriable. Interest is tax-free in India. Linked to an NRE savings account and ideal for parking foreign earnings in India.
For NRIs
💼
NRO RD
For NRIs' Indian income such as rent and dividends. Subject to TDS at 30%. Not freely repatriable beyond USD 1 million per year. Linked to an NRO savings account.
Indian Income
👴
Senior Citizen RD
Most banks offer an extra 0.25–0.75% over the regular RD rate for depositors aged 60 and above. Same tenure options and tax rules as a regular bank RD apply.
Higher Rate
8 Mistakes to Avoid with Recurring Deposits
These errors reduce your RD returns or create unnecessary tax and liquidity problems
1
Missing RD Installments
Banks charge ₹1–2 per ₹100 per month for delayed installments. Three consecutive defaults can lead to account closure and a premature penalty on the interest earned so far. Set up an auto-debit mandate on your salary account to avoid this.
2
Not Comparing Rates Across Banks
Small finance banks and co-operative banks often offer 0.5–1.5% more than large banks. Always check current rates across at least 5 lenders before opening an RD. A 1% difference on ₹5,000/month over 5 years translates to roughly ₹8,000–₹10,000 extra earnings.
3
Ignoring TDS on Interest
TDS is deducted if total interest from all deposits at a bank exceeds ₹40,000 per year (₹50,000 for seniors). Submit Form 15G or 15H at the start of the financial year to avoid unnecessary TDS deduction if your income is below the taxable limit.
4
Opening RD for Short-Term Goals
RD does not allow premature withdrawal without a penalty. For money needed in under 6 months, use liquid funds or a savings account instead. RD works best for goals that are at least 1 year away, giving enough time for compounding to add meaningful interest.
5
Not Considering Inflation
An RD at 7% pre-tax yields roughly 5% post-tax for a 30% slab taxpayer. With 5–6% inflation, real returns may be near zero or negative. Use RD only for capital preservation goals, not for long-term wealth creation — complement it with equity SIPs for inflation-beating growth.
6
Ignoring Auto-renewal Terms
Post Office RD auto-renews at the prevailing rate on the date of maturity, which may be lower than your original booking rate. Set a calendar reminder before maturity to review whether the renewed rate suits your goals or if a better alternative is available.
7
Putting Emergency Fund in RD
RD has premature withdrawal penalties, making it unsuitable for emergency funds that must be accessed instantly. Emergency funds should be parked in a savings account or liquid mutual fund — instruments that are accessible within 24 hours without any penalty or loss of interest.
8
Not Adding Nominee
Without a nominee, your family must go through a lengthy legal process involving a succession certificate or probate to claim your RD proceeds in case of your untimely death. Adding a nominee takes two minutes and is free — and you can update it at any time at your branch or via net banking.
Frequently Asked Questions
Everything you need to know about Recurring Deposits
What is an RD and how is it different from FD?
A Recurring Deposit (RD) is a savings instrument where you deposit a fixed amount every month for a chosen tenure and earn compound interest on it. Unlike a Fixed Deposit (FD), which requires a one-time lump sum investment, an RD accepts monthly installments — making it ideal for salaried individuals who want to save systematically. FD typically earns slightly higher effective interest because the full principal earns from day one, while in an RD each installment earns for a different duration. Both RD and FD interest are fully taxable as income from other sources at your applicable slab rate.
Can I withdraw my RD before maturity?
Most banks allow premature closure of an RD with a penalty of 1% on the interest rate applicable for the actual period held. For example, if you had booked an RD at 7% for 3 years but close it after 1 year, the bank will pay interest at the 1-year rate minus 1%. Post Office RD has stricter rules — it cannot be closed before completing 3 years, except in cases like the death of the depositor. Some digital-first banks now offer more flexible premature closure terms, so always check the fine print before opening.
Is RD interest taxable?
Yes, RD interest is fully taxable as "Income from Other Sources" and must be added to your total income each year, even if you have not yet received it. It is taxed at your applicable income tax slab rate (5%, 20%, or 30%). Banks deduct TDS at 10% if total interest from all deposits at that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). If your total income is below the taxable limit, submit Form 15G (below 60 years) or Form 15H (60 and above) at the beginning of each financial year to avoid TDS deduction.
What is the minimum amount for opening an RD?
The minimum monthly deposit for most bank RDs is ₹100, though some banks set a higher minimum of ₹500 or ₹1,000. Post Office RD accepts deposits from ₹100 per month in multiples of ₹10. There is no upper limit on the monthly deposit amount, and you can open multiple RD accounts simultaneously at different banks or the Post Office if you want to save more or stagger maturities across time periods.
What happens if I miss an RD installment?
If you miss an RD installment, the bank charges a default penalty of ₹1–2 per ₹100 per month on the missed installment amount. You can deposit the missed installment along with the penalty in a subsequent month. If three consecutive installments are missed, many banks treat the RD as defaulted and may close it prematurely with applicable penalty on the interest. Setting up an auto-debit from your salary account is the easiest way to prevent missed installments entirely.
Can I increase my RD monthly deposit amount?
No, the monthly deposit amount is fixed at the time of opening the RD and cannot be changed during the tenure. If you want to save a higher amount, you need to open a fresh RD with the new amount — either at the same bank or a different one. Many people run multiple RDs simultaneously, each with a different amount and maturity date, to give themselves flexibility in both the savings amount and when funds become available.
Is post office RD better than bank RD?
Post Office RD carries a sovereign guarantee from the Government of India, making it the safest RD option available — safer than bank RDs, which are insured only up to ₹5 lakh by DICGC. The Post Office RD currently offers 6.7% p.a. compounded quarterly for a fixed 5-year tenure. Bank RDs offer more flexibility in tenure (6 months to 10 years) and may offer higher rates, especially small finance banks. Choose Post Office RD if safety is your top priority and a 5-year horizon suits you; choose bank RD for more tenure flexibility or better rates.
Can NRI open RD in India?
Yes, NRIs can open RDs in India through two account types. NRE RD (Non-Resident External) is rupee-denominated, interest is tax-free in India, and both principal and interest are fully repatriable to the NRI's foreign country. NRO RD (Non-Resident Ordinary) is for Indian-sourced income such as rent or dividends — interest is subject to TDS at 30% and repatriation is capped at USD 1 million per year. NRIs cannot open Post Office RDs after acquiring non-resident status.
Is RD better than SIP for regular saving?
RD and SIP serve different risk profiles and investment horizons. RD provides guaranteed, risk-free returns (currently 6–8% p.a.) with DICGC or sovereign protection — ideal for goals within 1–3 years where capital safety is paramount, such as a car down payment or a child's school fees. SIP in equity mutual funds targets higher returns (historically 10–15% p.a. over 7+ years) but with market risk and potential short-term volatility. Many financial planners recommend using RD for near-term goals and SIP for long-term wealth creation, rather than choosing one over the other.
What is the compounding frequency in RD?
Indian banks and the Post Office compound RD interest quarterly — meaning interest is calculated and added to the balance every three months. This is the standard method mandated by RBI guidelines for bank RDs and by the Ministry of Finance for Post Office RDs. Some calculators use monthly compounding for simplicity, which gives a slightly higher result. When comparing bank offers, always check whether the stated rate is under quarterly or monthly compounding to make an accurate comparison.
Can I open multiple RD accounts?
Yes, you can open as many RD accounts as you like across different banks and the Post Office simultaneously. There is no restriction on the number of RDs you can hold. Running multiple RDs with staggered maturity dates — a technique called RD laddering — gives you regular access to funds throughout the year while ensuring your money is always earning RD-level interest. This is a popular strategy for managing short-to-medium term financial goals like school fees, insurance premiums, or annual vacations.
What happens to RD on death of the depositor?
If a nominee is registered on the RD, the bank or post office will pay the maturity amount (or the balance with applicable interest up to the date of death) directly to the nominee upon production of the death certificate and nominee's KYC documents — a relatively quick process. If no nominee is registered, the legal heirs must produce a succession certificate or probate from a court, which can take months and incur legal costs. This is why adding a nominee when opening any deposit account is strongly recommended and takes only a few minutes.