RD Calculator

Recurring deposit maturity and interest on your monthly savings, compounded quarterly.

Monthly deposit

₹5,000

Interest rate

Tenure

1 yr

RD Calculator

Maturity amount₹62,477

Total deposited₹60,000
Interest earned₹2,477
Maturity amount₹62,477

Deposits vs interest

Deposited ₹60,000
Interest ₹2,477

How a recurring deposit works

A recurring deposit turns a saving habit into a guaranteed return. You commit to paying a fixed sum into the RD every month for a chosen term, and the bank pays a locked-in rate on each instalment from the day it lands until the deposit matures. It suits salaried savers who want the discipline of putting away the same amount each month.

The detail that surprises many people is that not every rupee earns the full-term interest. Your first instalment stays invested for the entire tenure, but the last one earns barely a month’s worth, so the effective return on everything you pay in is lower than the headline rate suggests. Interest is compounded quarterly, the same convention banks use for fixed deposits.

M = R × Σ (1 + i)^(mₖ ÷ 3), summed over every instalment k

where R = fixed monthly deposit; i = annual rate ÷ 400 (the quarterly rate as a decimal); mₖ = months the k-th instalment stays in the account; dividing the months by 3 converts each holding period into quarters

RD maturity worked example

Take the default here: ₹5,000 saved every month at 6.5%. Over one year you pay in ₹60,000 and receive about ₹62,093 — roughly ₹2,093 of interest. Stretch the same monthly amount to five years and you pay in ₹3,00,000 but collect about ₹3,54,670, because the early instalments have had years to compound. Longer tenures reward you out of proportion to the extra time.

RD of ₹5,000/month at 6.5%, compounded quarterly
1 year — you pay in ₹60,000	₹62,093
3 years — you pay in ₹1,80,000	₹1,98,955
5 years — you pay in ₹3,00,000	₹3,54,670

RD vs SIP

An RD and a mutual-fund SIP both take a fixed sum from you every month, yet they behave very differently. An RD gives you a rate fixed on day one and a maturity value you can work out to the rupee — there is no market risk at all. A SIP buys units of a fund whose value rises and falls with the market, so its final worth is unknown and can land above or below an RD.

For short goals or money you cannot afford to lose, the certainty of an RD wins. Over long horizons an equity SIP has historically out-earned an RD by a wide margin, but only for investors willing to sit through the ups and downs along the way.

Who should use an RD

An RD fits you if you draw a regular income, want a firm savings target, and would rather not watch a market. It is popular for short goals two to three years out — a gadget, a trip, a down payment — where you want to know exactly how much you’ll have and when. Because many banks let you start with as little as ₹100 a month, it is also a gentle first step for a new saver before moving on to market-linked investments.

Frequently asked questions

How is RD interest calculated?

Interest is compounded quarterly, and each monthly instalment earns interest only from the date it is deposited. Because later instalments spend less time in the account, the effective yield on everything you pay in sits a little below the quoted rate.

Is RD interest taxable?

Yes. Like FD interest, RD interest is added to your income and taxed at your slab rate. Banks also deduct 10% TDS on RD interest once it crosses ₹50,000 from that bank in a financial year, so report it in your return even if TDS has already been cut.

What happens if I miss an RD instalment?

The bank charges a small penalty for each missed instalment — often a rupee or two per ₹100 of the monthly amount — and adds it to your dues. Missing several payments in a row can lead the bank to close the RD before term.

Can I close an RD before it matures?

Yes. On early closure you get your instalments back with interest calculated at the rate applicable for the period the deposit actually ran, usually reduced by a small premature-closure penalty of around 1%.

Is an RD better than an FD?

Neither is strictly better — they solve different problems. Choose an FD when you already hold a lump sum to park, and an RD when you want to build savings out of a monthly income. For the same rate and the same total money, an FD earns more because the whole amount is invested from day one.

Guides that use this calculator

Where should money sit for 1, 3, 5 and 10+ years?The best investment is a function of when you need the money back. A horizon-by-horizon map for Indian savers — savings, FD, RD, debt, PPF, equity — with computed numbers and the two mistakes that cost the most.
First salary? Here’s the whole money plan on one pageWhat to actually do with a first salary in India — in order: know your real in-hand, build one month of float, then the emergency RD, then a small SIP you never stop. With the ₹45 lakh cost of starting five years late.
How big should your emergency fund be — and where should it sit?Six months of expenses is the standard answer; your actual number depends on how replaceable your income is. Where you park it matters almost as much: the same ₹3.6 lakh earns ₹10,900 in a savings account and ₹25,100 in an FD over a year.
FD laddering: lock rates without locking yourself outSplitting one deposit into several maturities solves the two problems every FD investor faces — needing money mid-tenure and reinvesting everything at whatever rate prevails on one arbitrary day. How to build a ladder, with the premature-withdrawal math.