RD Calculator

What is a recurring deposit?

A recurring deposit (RD) is a savings product where you deposit a fixed amount every month for a fixed tenure and receive the total plus interest at maturity. It is the disciplined cousin of the fixed deposit: instead of needing a lumpsum, you commit to a monthly amount — as low as ₹100 at the post office — and the bank locks the interest rate for the entire term. RDs suit short-term goals with a known date, such as a holiday next year, school admission fees, or building the seed for a future FD.

How the RD calculator works

Enter the monthly instalment, the annual rate and the tenure. The calculator treats every instalment as a separate mini-deposit that earns quarterly-compounded interest for the months remaining until maturity, then adds them up. This is exactly how banks and India Post compute RD maturity, so the figure should match your passbook to within a rupee or two of rounding.

RD maturity formula

Maturity = Σ P × (1 + r ÷ 4)^(4 × n ÷ 12), summed over every instalment

• P = monthly deposit
• r = annual rate as a decimal
• n = number of months that particular instalment stays invested (from the total tenure down to 1)

Example: ₹5,000 per month for 5 years at 6.7% (post office rate) — total deposits of ₹3,00,000 grow to roughly ₹3,56,800, an interest gain of about ₹56,800.

RD vs SIP vs FD

• RD — guaranteed return, capital safe, interest taxable. Best for goals under 3 years.
• SIP in a mutual fund — market-linked, higher long-term potential, tax-efficient for equity. Best for goals 5+ years away.
• FD — same safety as RD but needs the money up front; usually a slightly higher rate.

Many people run an RD for a year, then move the maturity amount into an FD or a lumpsum investment.

Rules worth knowing

• Missed instalments attract a small penalty (post office: ₹1 per ₹100 per month) and repeated defaults can close the account.
• Premature closure is allowed after a minimum period, but the bank pays interest at the rate applicable to the actual period run, minus a penalty.
• TDS applies to RD interest exactly as it does to FD interest; submit Form 15G/15H if eligible.
• Senior citizens get the same 0.25–0.75% bonus that applies to FDs at most banks.
• Loan against RD is available at most banks — typically up to 90% of the balance — cheaper than a personal loan in an emergency.

Try different tenures in the calculator: because every instalment compounds quarterly, stretching from 3 to 5 years increases the interest share of the maturity amount noticeably.

Frequently asked questions