What is a Recurring Deposit (RD)?
A Recurring Deposit (RD) is a savings product where you deposit a fixed amount every month for a fixed period, for example 12, 36 or 60 months, and earn a fixed interest rate. At maturity you receive all deposits plus the interest. It is ideal for people who cannot invest a lump sum but can save regularly, and it works like a SIP with guaranteed returns.
This RD calculator shows the maturity amount and interest for any monthly deposit, interest rate and tenure, using quarterly compounding as banks in India do.
RD Maturity Formula
Each monthly instalment earns compound interest for the months it stays in the deposit. With a quarterly rate of i = annual rate ÷ 4:
R = monthly deposit · i = annual rate ÷ 400 · q = months remaining ÷ 3
| Monthly deposit | Tenure | Rate | Deposited | Interest | Maturity |
|---|---|---|---|---|---|
| ₹1,000 | 12 months | 7% | ₹12,000 | ₹462 | ₹12,462 |
| ₹5,000 | 36 months | 7% | ₹1,80,000 | ₹20,686 | ₹2,00,686 |
| ₹5,000 | 60 months | 7% | ₹3,00,000 | ₹59,664 | ₹3,59,664 |
| ₹10,000 | 24 months | 7% | ₹2,40,000 | ₹18,198 | ₹2,58,198 |
RD vs FD vs SIP
| RD | FD | SIP (mutual fund) | |
|---|---|---|---|
| Deposit | Monthly | One time | Monthly |
| Return | Fixed | Fixed | Market-linked |
| Risk | Very low | Very low | Moderate to high |
| Tax on interest | Taxable | Taxable | Capital gains rules |
Use RD for short goals of 1 to 5 years, such as a vacation or a gadget, and SIP for goals longer than 7 years. If you have a lump sum, use the FD calculator.
RD Interest Tax
Interest on a bank RD is taxable as per your slab and the bank deducts 10% TDS if the total interest from that bank crosses ₹50,000 in a year (₹1,00,000 for senior citizens). Submit Form 15G or 15H if your income is below the taxable limit.
How to Use This RD Calculator
- Enter your monthly deposit.
- Enter the interest rate offered by your bank or post office.
- Choose the tenure in months.
- Read the maturity amount and save the report with Preview & Save.
Tip: Banks usually charge a small penalty for a missed instalment and a lower rate for premature closure. Set an auto-debit to avoid both.
Using an RD to Reach a Goal
An RD is perfect for goals with a fixed date and amount. If you need ₹3.5 lakh in 5 years, a monthly RD of about ₹4,900 at 7% reaches it (₹5,000 a month gives ₹3.60 lakh). Use the calculator to find the monthly amount that matches your target.
- Choose a tenure that ends when you need the money.
- Compare rates across banks and post office RD, which is government-backed.
- Do not break the RD early unless you must; the lower rate and penalty reduce the return.