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What is a Recurring Deposit (RD) Calculator?
A Recurring Deposit lets you build savings discipline by depositing a fixed sum every month into a bank or post office account, earning interest at rates similar to fixed deposits. Unlike a lump-sum FD, an RD suits salaried individuals who want to save gradually rather than invest a large amount upfront. This calculator projects the maturity value of your monthly instalments so you can compare RD schemes at SBI, HDFC, ICICI, or your local post office before locking in your money for a fixed tenure.
RD Maturity Formula
Indian banks compound RD interest quarterly, which makes the maths trickier than a simple SIP. The standard formula used by this calculator is:
Here, R is your monthly deposit, i is the quarterly interest rate (annual rate ÷ 4 ÷ 100), and n is the number of quarters in your tenure (months ÷ 3).
Worked Example
Suppose you deposit ₹5,000 every month for 24 months at an annual rate of 6.5%. That gives a quarterly rate i = 0.01625 and n = 8 quarters. Plugging these into the formula above produces a maturity value of roughly ₹1,28,400. Since you deposited ₹5,000 × 24 = ₹1,20,000 in total, the quarterly compounding effect adds around ₹8,400 in interest over two years — noticeably more than what simple interest would give you.
How to Use This Calculator
- Enter your planned monthly deposit amount in rupees.
- Enter the annual interest rate offered by your bank or post office (typically 6%–7.5%).
- Enter the tenure in months (RDs usually run from 6 months to 10 years).
- Click Calculate to see your projected maturity amount instantly.
Things to Know
- Interest earned on RDs is fully taxable as "income from other sources," and banks deduct TDS if total interest across your deposits with that bank crosses ₹40,000 in a year (₹50,000 for senior citizens).
- Post Office RDs currently offer government-backed rates that are revised quarterly, and are a popular option for risk-averse savers in smaller towns.
- Breaking an RD before maturity usually attracts a penal interest rate cut of around 1%–2%, so it works best when you're confident about the monthly commitment.
More Worked Examples Across Deposit Sizes
RD maturity values scale with both the monthly instalment and the tenure, so it helps to compare a few realistic scenarios. A smaller RD of ₹2,000 per month for 12 months at 6.5% p.a. matures to about ₹24,857, against a total deposit of ₹24,000 — a modest but useful way to build a short-term goal fund. A medium RD of ₹3,000 per month for 5 years (60 months) at 7% p.a. grows to approximately ₹2,15,798, against total deposits of ₹1,80,000 — meaning quarterly compounding adds roughly ₹35,798 over the tenure. And a larger RD of ₹10,000 per month for 3 years (36 months) at 7% p.a. matures to around ₹4,01,373, against total deposits of ₹3,60,000. Across all three, the interest earned as a percentage of total deposits rises with tenure — a natural result of compounding needing time to meaningfully outpace a simple sum of instalments.
RD vs Lump-Sum FD: Which Should You Choose?
The core difference is cash flow: an RD suits someone with a steady salary who can commit a fixed sum every month but doesn't have a large lump sum sitting idle, while an FD suits someone who already has the full amount ready to deposit today. Because RD instalments are spread across the tenure, later deposits earn interest for a shorter period than earlier ones, so an RD's effective yield on the same nominal rate is always somewhat lower than a lump-sum FD's yield over an identical tenure — this is a mathematical consequence of the deposit timing, not a difference in the interest rate itself. That said, an RD builds a valuable savings habit that a lump-sum FD doesn't require, which is why many first-time savers and salaried employees prefer starting with an RD before graduating to lump-sum FDs or PPF once they've accumulated enough surplus.
Who Should Use This Calculator
This tool is built for salaried individuals and small savers who want to build a savings discipline by committing a fixed sum every month, rather than investing a lump sum upfront. It suits goals like building an emergency fund over 1-3 years, saving for a specific short-term purchase, or simply parking monthly surplus income somewhere safer than a savings account while still earning FD-like returns. It's also commonly used by people comparing a bank RD against a Post Office RD, or against starting a debt mutual fund SIP instead — since RD returns are fixed and guaranteed (unlike market-linked SIPs), this calculator is especially useful when you need certainty about the exact maturity amount for a near-term goal.
Frequently Asked Questions
Q: What's the difference between an RD and a recurring SIP in mutual funds?
A: An RD offers a fixed, guaranteed interest rate set at account opening and is backed by the bank/post office, making the maturity amount fully predictable. A SIP in mutual funds invests in market-linked instruments, so returns fluctuate and aren't guaranteed, but historically offer higher long-term growth potential, especially through equity funds, at the cost of short-term volatility.
Q: How is RD interest compounded?
A: Banks in India typically compound RD interest quarterly, similar to fixed deposits, even though you're depositing monthly. This calculator uses the standard quarterly-compounding RD formula, which is slightly more complex than a simple monthly compounding SIP formula because each monthly instalment earns interest for a different number of quarters remaining until maturity.
Q: What is the minimum and maximum tenure for an RD?
A: Most banks and post offices offer RD tenures ranging from 6 months up to 10 years, in multiples of 3 months. Post Office RDs specifically run on a standard 5-year tenure with an option to extend. Always check your specific bank's minimum deposit amount and tenure flexibility before opening one.
Q: Is RD interest taxable, and does TDS apply?
A: Yes, RD interest is fully taxable as income from other sources at your slab rate. Banks deduct 10% TDS if your total interest from RDs and FDs with that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens) — you can avoid this by submitting Form 15G/15H if your total income is below the taxable threshold.
Q: What happens if I miss a monthly RD instalment?
A: Most banks charge a small penalty (often ₹1-1.50 per ₹100 of the missed instalment per month) for late or missed payments, and consistently missing instalments can lead to the account being closed before maturity, sometimes at a reduced interest rate. It's important to only commit to a monthly amount you're confident you can sustain for the full tenure.
📅 Last reviewed: July 2026 · Formulas verified against RBI/SEBI/IT Dept guidelines.