RD Calculator
Calculate your recurring deposit maturity value and see how your monthly deposits grow over time.
Total Deposited
₹3,00,000
Total Interest
₹61,746
Maturity Value
₹3,61,746
Growth Over Time
₹3,61,746
| Year | Deposited | Value |
|---|---|---|
| 1 | ₹60,000 | ₹62,671 |
| 2 | ₹1,20,000 | ₹1,29,846 |
| 3 | ₹1,80,000 | ₹2,01,848 |
| 4 | ₹2,40,000 | ₹2,79,024 |
| 5 | ₹3,00,000 | ₹3,61,746 |
| Year | Deposited | Value | Interest |
|---|---|---|---|
| 1 | ₹60,000 | ₹62,671 | ₹2,671 |
| 2 | ₹1,20,000 | ₹1,29,846 | ₹9,846 |
| 3 | ₹1,80,000 | ₹2,01,848 | ₹21,848 |
| 4 | ₹2,40,000 | ₹2,79,024 | ₹39,024 |
| 5 | ₹3,00,000 | ₹3,61,746 | ₹61,746 |
What is a Recurring Deposit (RD)?
A Recurring Deposit (RD) is a savings product offered by banks and post offices where you deposit a fixed amount every month for a predetermined tenure. At maturity, you receive your total deposits plus the accumulated interest. RDs are ideal for salaried individuals who want to build a corpus through disciplined monthly savings with guaranteed returns.
RD vs SIP
Both RD and SIP involve regular monthly investments, but they differ significantly:
- RD: Fixed guaranteed returns (6-7%), no market risk, interest is taxable, best for short-term goals
- SIP: Market-linked returns (10-15% historical average), subject to market risk, LTCG tax benefits, best for long-term wealth creation
For goals under 3 years, RDs are safer. For goals beyond 5 years, SIPs typically outperform. Try SIP Calculator →
How RD Interest is Calculated
RD interest is compounded quarterly using the formula: A = P × (1 + r/n)^(n×t) applied to each monthly deposit separately. Each instalment earns interest from the month it is deposited until maturity. The first instalment earns interest for the full tenure, while the last instalment earns interest for only one month. Most banks use quarterly compounding (n=4) for RDs.
FAQ: What happens if I miss an RD instalment?
If you miss an instalment, most banks charge a penalty (typically ₹1-2 per ₹100 of the instalment per month of default). You can usually pay the missed instalment along with the penalty in the next month. However, if you miss too many consecutive instalments (usually 3-6 months), the bank may prematurely close the RD, and you will receive a lower interest rate.
FAQ: Is RD interest taxable?
Yes, RD interest is fully taxable and added to your total income. TDS is deducted at 10% if the interest exceeds ₹40,000 in a year (₹50,000 for senior citizens). Unlike FDs, there is no tax-saving variant of RD. If you are in a higher tax bracket, consider SIPs in equity mutual funds for better post-tax returns on longer tenures.
FAQ: Can I withdraw my RD before maturity?
Yes, premature withdrawal of RD is allowed, but you will receive a lower interest rate (usually 0.5-1% less than the contracted rate). Some banks also charge a premature closure penalty. Post office RDs can be prematurely closed after 3 years. It is advisable to choose a tenure that matches your financial goal to avoid early withdrawal.