RD Calculator
Calculate the maturity amount of a bank Recurring Deposit with monthly instalments and quarterly compounding.
India-specific calculator. It uses Indian rules, rates and rupee amounts, and the currency selector is switched off on this page.
A Recurring Deposit (RD) lets you build a savings corpus by depositing a fixed amount every month. This RD calculator estimates the maturity value using the quarterly compounding method most Indian banks and the post office follow.
How to use the calculator
- Enter the amount you deposit every month.
- Add the annual interest rate offered on your RD.
- Set the tenure in months — most banks allow 6 to 120 months.
- The calculator instantly shows your maturity value, total deposits and interest.
How it is calculated
Where P = monthly deposit, i = annual rate ÷ 12 ÷ 100 and n = number of monthly instalments.
Worked example
₹5,000 per month for 24 months at 7%
Total deposits = ₹1,20,000
Estimated maturity ≈ ₹1,29,000, with interest of roughly ₹9,000.
Who should use this calculator
- Anyone with a regular monthly surplus but no lump sum, who wants a disciplined way to build a small corpus.
- Savers funding a goal that is 12–36 months away, such as school fees, an insurance premium or a booking payment.
- People who keep meaning to invest but find it easier to commit to a fixed monthly amount than to an SIP in the market.
- Parents setting aside a fixed sum every month rather than parking a large amount in a low-yield savings account.
Common mistakes to avoid
- Comparing the RD rate directly with an FD rate. In an RD each instalment earns interest only from the month it is deposited, so the average balance is roughly half the total deposited. The same headline rate produces a much smaller interest figure.
- Forgetting that RD interest is taxable. Interest is added to your income and taxed at your slab, and banks may deduct TDS once it crosses the annual threshold.
- Breaking the deposit early. Premature closure typically costs 0.5–1% of the applicable rate, which can erase most of what you earned.
- Choosing a tenure longer than the goal. If the money is needed in 18 months, a 24-month RD will not help — the penalty for early closure will hurt more than the extra interest.
- Relying on memory for the monthly deposit. Set an automatic standing instruction; a couple of missed months changes the maturity value more than people expect.
Why RD interest looks lower than FD interest
Deposit ₹5,000 a month for 24 months at 7% and you will see roughly ₹1,29,000 at maturity — about ₹9,000 of interest on ₹1,20,000 deposited. The same ₹1,20,000 in a single FD for two years would earn considerably more, and there is nothing wrong with the RD.
The difference is that the RD money arrives in pieces. The first instalment earns interest for the full 24 months, while the last one earns it for barely one month. On average only about half of your money is actually on deposit at any moment, so the interest reflects that. RD is best understood as a savings habit that pays a reasonable rate, not as a way to maximise interest on a lump sum you already have.
RD terms explained
- Quarterly compounding
- Most banks calculate RD interest on a quarterly compounding basis, which is why the monthly equivalent rate is not simply the annual rate divided by twelve.
- Premature closure
- Closing the RD before maturity. Banks normally pay 0.5–1% less than the contracted rate.
- Standing instruction
- An automatic monthly transfer from your savings account into the RD, which prevents gaps in deposits.
- Tax deducted at source
- Tax the bank withholds on your interest once it crosses the annual limit, unless you file Form 15G or 15H.
- Sweep-in RD
- A linked facility where surplus savings above a threshold move automatically into a deposit and back when needed.
RD or SIP for a monthly surplus?
Both build a habit, but they behave differently. An RD pays a known rate, so the maturity value is certain — useful when the goal is close and the money cannot afford to fall. A SIP is market-linked, so it can do considerably better over long periods and considerably worse over short ones. A practical rule: if the money is needed within three years, an RD or a debt fund is the safer fit; if the horizon is seven years or more, a SIP gives the surplus a chance to grow faster than a deposit. Some investors split the monthly amount between the two and get both certainty and growth.
Frequently asked questions
How is RD interest calculated?
Banks calculate RD interest on a quarterly compounding basis. Each monthly instalment starts earning interest from the month it is deposited, and the maturity value depends on the rate, tenure and deposit amount.
Is TDS deducted on RD interest?
If your total interest income from the bank exceeds the prescribed threshold in a financial year, the bank may deduct TDS at 10% (or 20% if PAN is not provided). You can submit Form 15G/15H if you are eligible.
Can I close an RD early?
Yes, but most banks charge a penalty of 0.5% to 1% on the applicable interest rate if you close the RD before maturity. A maturity RD gives you the full quoted rate.