Tools To India

RD Calculator

Enter your monthly instalment, the rate and the tenure to see what a recurring deposit will be worth at maturity.

Last updated

₹5K

The result updates as you type. Nothing you enter is saved, sent to a server or shared.

Maturity amount

₹3,57,300

₹57,300 of interest on ₹3,00,000 deposited

Deposited versus interest

  • Deposited: ₹3,00,000
  • Interest: ₹57,300
Total deposited
₹3,00,000
Interest earned
₹57,300
Maturity amount
₹3,57,300
  • Interest is compounded quarterly on monthly instalments, which is the convention Indian banks follow.
  • RD interest is fully taxable at your slab rate. The figures above are before tax.

How this calculator works

A recurring deposit is a fixed monthly payment into a deposit account that earns a fixed rate for a fixed term. It suits people who want deposit-style certainty but do not have a lump sum to place.

The interest calculation is less obvious than it looks. Banks compound RD interest quarterly, but instalments arrive monthly, so each instalment earns for a different length of time. The first instalment earns for the whole tenure; the last earns for barely a month.

This calculator converts the quarterly rate into its exact monthly equivalent and compounds each instalment for the months it stays invested, which reproduces the standard bank RD maturity formula to the rupee.

Because only the earliest instalments compound for long, an RD earns noticeably less than a fixed deposit of the same total amount at the same rate. That is not a flaw — the money simply is not there for as long.

The formula

Recurring deposit maturity

M = R × ((1 + i)ⁿ − 1) ÷ (1 − (1 + i)^(−1/3))

R
Monthly instalment
i
Quarterly rate = annual rate ÷ 4
n
Number of quarters

The unusual (−1/3) exponent converts the quarterly rate into a monthly one, because instalments arrive three times as often as interest is compounded.

Worked example: ₹5,000 a month at 6.75% for 5 years

Imran opens a recurring deposit of ₹5,000 a month for 60 months at 6.75%.

Step-by-step calculation for the worked example
Monthly instalment₹5,000
Total deposited over 60 months₹3,00,000
Quarterly rate1.6875%
Maturity amount₹3,57,441
Interest earned₹57,441
Same ₹3 lakh as a 5-year FD at 6.75%₹4,19,584

The RD earns considerably less than a lump-sum FD of the same total, because in an RD the average rupee is invested for only about half the tenure. The RD wins on accessibility, not on return.

Things worth knowing

  • RD interest is fully taxable at your slab rate, and banks deduct TDS once it crosses the annual threshold.
  • Missing an instalment usually attracts a small penalty and, if repeated, the bank can close the account prematurely at a reduced rate.
  • Premature closure means interest is recalculated at the rate applicable for the period completed, minus a penalty.
  • Post office recurring deposits follow a different rate, notified quarterly by the Ministry of Finance, and a different set of rules from bank RDs.
  • For the same total amount and rate, a fixed deposit will always mature higher than a recurring deposit. Compare them on what you can actually commit, not on headline maturity values.

Frequently asked questions

Why does an RD earn less than an FD at the same rate?
Because the money is not invested for the same length of time. In a five-year FD, the entire amount earns for five years. In a five-year RD, only the first instalment does; the final instalment earns for one month. The average holding period is roughly half, so the interest is roughly half.
What happens if I miss an instalment?
Most banks charge a small penalty per missed instalment and allow you to catch up. Repeated defaults can lead the bank to close the account and pay interest at a reduced rate. Setting up a standing instruction from your salary account avoids the problem entirely.
Is RD interest taxable?
Yes, fully, at your slab rate, in the year it accrues. TDS applies once interest crosses the annual threshold, with a higher threshold for senior citizens. If your total income is below the taxable limit, Form 15G or 15H prevents the deduction.
Can I withdraw an RD before maturity?
Yes, but interest is recalculated at the rate applicable for the period actually completed and a penalty is applied. Some banks also require a minimum period before premature closure is permitted at all.

Sources

Every figure on this page is traceable to the official source below. If a source has changed since the date shown, please tell us and we will correct it.