RD Calculator

How a recurring deposit works

A recurring deposit (RD) lets you save a fixed amount every month for a chosen period, from six months to ten years at most banks, and five years at the post office. It earns fixed deposit-like interest, making it a good way to save towards a goal such as a vacation, a gadget or an emergency fund when you don’t have a lump sum.

Calculation method

Banks and India Post compound RD interest quarterly. Each monthly instalment earns interest for the time it stays deposited: the first instalment for the whole tenure, the last for just one month. The calculator adds up every instalment’s growth using quarterly compounding, which is how most Indian banks calculate RD maturity.

Example

₹5,000 a month for 5 years at 6.7% means you deposit ₹3 lakh and receive roughly ₹3.57 lakh at maturity. Change the rate and tenure to match your bank’s offer.

Things to know

• Missed instalments may attract a small penalty; several missed instalments can lead to closure.
• Tax: RD interest is taxable at your slab rate, and banks deduct TDS above the threshold.
• Premature closure usually reduces the interest rate.
• Post office RD rates are set quarterly by the government.

RD vs SIP vs FD

An RD gives guaranteed returns on monthly savings. A mutual fund SIP may earn more over the long term but isn’t guaranteed; compare with the SIP calculator. If you already have a lump sum, an FD usually earns more than spreading it over an RD.

Quick answers

Can I increase my RD instalment later? No, the instalment is fixed; open another RD for extra savings. Is RD better than a savings account? Yes, RDs usually pay a noticeably higher rate than savings accounts. What happens at maturity? The amount is credited to your linked account or you can renew it.