Enter monthly deposit, tenure, interest rate, and compounding frequency, then click "Calculate RD".
Example: ₹5,000/month for 5 years at 7% quarterly → ~₹3,59,000 maturity, ₹59,000 interest
The RD Calculator (Recurring Deposit Calculator) helps you estimate the maturity amount of your monthly recurring deposit. RDs are popular savings instruments offered by banks where you deposit a fixed amount each month and earn compound interest (typically compounded quarterly). This recurring deposit calculator shows your total deposited amount, interest earned, and final maturity value. It works with any currency – select yours from the dropdown.
Recurring Deposit Formula
M = P × ((1 + r)^n - 1)/r × (1 + r)
Where P = monthly deposit, r = monthly interest rate, n = total number of months.
For example, depositing ₹5,000 per month for 5 years at 7% annual interest (compounded quarterly) yields approximately ₹3,59,000 at maturity. Total deposited is ₹3,00,000, so you earn ₹59,000 in interest. RD is a low-risk, disciplined saving method ideal for short to medium-term goals.
Applications
Short-term goal saving: Down payment, vacation, wedding fund.
Emergency fund building: Regular savings with guaranteed returns.
RD is for regular monthly savers – you build a corpus over time. FD (Fixed Deposit) requires a lump sum upfront. If you have a lump sum, FD typically gives slightly higher returns because the entire amount earns interest from day one. For monthly savers, RD is the right choice.
Use our FD calculator for lump sum investments and SIP calculator for mutual fund monthly investments.
Interest rate: Compare rates across banks (small finance banks often offer higher rates).
Tenure: Common tenures range from 6 months to 10 years.
Premature withdrawal penalty: Usually 1% lower interest.
Taxation: Interest is taxable; TDS applies if interest exceeds threshold.
Common RD Mistakes
Missing monthly deposits: Most banks allow a grace period, but repeated defaults may reduce interest.
Not comparing rates: Even a 0.5% higher rate can add thousands over long tenures.
Ignoring tax implications: Factor in TDS when calculating post-tax returns.
RD vs. SIP – Which One to Choose?
RD is guaranteed returns (low risk) – suitable for short-term goals (<5 years) and conservative investors. SIP (Systematic Investment Plan) in mutual funds offers potentially higher returns (10-12%) but with market risk. For long-term goals (10+ years), SIP is better; for short-term safety, RD is ideal.
Use this RD calculator to plan your monthly savings. Bookmark it to compare different tenures and interest rates.
Step‑by‑Step Manual Example
RD: ₹5,000/month for 5 years at 7% annual interest (compounded quarterly)
Frequently Asked Questions about Recurring Deposits
What is a Recurring Deposit (RD)?
A Recurring Deposit (RD) is a guaranteed savings plan where you deposit a fixed sum of money every month for a set tenure, earning compound interest (usually compounded quarterly by banks).
How is interest calculated on a Recurring Deposit?
Interest is calculated on each monthly installment based on the remaining tenure. The formula uses quarterly compounding: M = P × ((1 + r)^n - 1) / r × (1 + r), where r is monthly rate.
Is a Recurring Deposit safe?
Yes. Bank Recurring Deposits are guaranteed and insured up to applicable government protection limits (e.g. DICGC in India up to ₹5 lakhs, FDIC in the US up to $250,000).
What happens if I withdraw my RD before maturity?
Banks permit premature RD withdrawal but charge a penalty fee, typically reducing the applicable interest rate by 0.5% to 1.0% for the period held.
Is RD interest income taxable?
Yes. Interest earned on Recurring Deposits is fully taxable according to your income tax slab. Banks deduct TDS if annual interest exceeds tax thresholds.
Do senior citizens get higher RD interest rates?
Yes. Most commercial banks and post offices offer senior citizens an additional 0.50% p.a. interest rate on Recurring Deposits.
What is the difference between RD and FD?
A Fixed Deposit (FD) requires a single upfront lump-sum investment, whereas a Recurring Deposit (RD) allows disciplined monthly installment savings over time.
What is the difference between RD and SIP?
RD offers guaranteed, risk-free fixed interest returns. SIP (Systematic Investment Plan) in equity mutual funds offers higher return potential (10-14%) but comes with market volatility.