How to use this RD calculator
- Enter the monthly instalment you plan to deposit.
- Set the annual interest rate offered by your bank — typically 5.5%–7.5% for RDs.
- Choose the tenure in months (6 to 120 months).
- The calculator instantly shows your maturity amount, total deposited, interest earned, a pie chart breakdown, and a growth chart.
- Expand the deposit breakdown to see yearly or quarterly details.
What is a recurring deposit (RD)?
A recurring deposit is a savings product offered by banks where you deposit a fixed amount every month for a predetermined period. The bank compounds the interest — usually quarterly — and pays you the maturity amount (all deposits + accumulated interest) at the end of the tenure.
RDs are ideal for people who want to build savings discipline without committing a large lump sum. They combine the safety of a fixed deposit with the flexibility of monthly contributions.
RD maturity formula
A simplified approach: each monthly instalment is treated as a separate deposit compounded quarterly for its remaining tenure. The maturity value is the sum of all individual maturities.
For a quick approximation, the formula used by most banks treats each instalment as compounding quarterly:
Where ti is the remaining tenure in years for the i-th instalment, r is the annual rate (decimal), and P is the monthly instalment.
RD vs FD vs SIP
| Factor | RD | FD | SIP |
|---|---|---|---|
| Investment type | Monthly, fixed | Lump sum, fixed | Monthly, market-linked |
| Returns | Guaranteed (5–7.5%) | Guaranteed (6–7.5%) | Not guaranteed (10–15% historically) |
| Risk | Very low | Very low | Moderate to high |
| Liquidity | Premature withdrawal with penalty | Premature withdrawal with penalty | Redeem anytime (after exit load) |
| Best for | Regular small savings | Lump sum parking | Long-term wealth creation |
Frequently asked questions
What is the minimum amount and tenure for an RD?
Most banks allow RDs starting from ₹100 or ₹500 per month. Minimum tenure is usually 6 months, and maximum tenure is typically 10 years (120 months).
Is RD interest taxable?
Yes. Interest earned on recurring deposits is taxable under "Income from Other Sources." TDS is deducted at 10% if total interest across all FD/RD accounts in a bank exceeds ₹40,000/year (₹50,000 for senior citizens).
Can I miss an RD instalment?
Missing an instalment attracts a small penalty (usually ₹1–₹2 per ₹100 per month of default). If you miss multiple instalments consecutively, the bank may close the RD prematurely, and you will receive a lower interest rate.
Can I withdraw my RD before maturity?
Yes, but premature closure typically incurs a penalty of 0.5%–1% on the applicable rate. Some banks convert the RD to a savings account balance upon premature closure.
How is RD different from SIP?
RD invests in a bank deposit with a guaranteed return, while SIP invests in mutual funds with market-linked (variable) returns. RD is safer but offers lower returns; SIP has higher risk but potentially much higher long-term returns.