RD Calculator
Calculate the maturity value of your Recurring Deposit with our free online RD Calculator. Get accurate results for any Indian bank RD based on monthly deposit amount, interest rate, tenure, and compounding frequency. Plan your savings and know exactly how much your regular deposits will grow.
Calculate Your RD Returns
RD Calculation Results
How RD Interest is Calculated
A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a predetermined period. Interest is calculated using compound interest, where each monthly deposit earns interest for the remaining tenure.
RD Maturity Formula
M = Σ P × (1 + r/n)(n×t)
For each monthly deposit:
- M = Maturity Amount (sum of all deposits with interest)
- P = Monthly Deposit Amount
- r = Annual Interest Rate (in decimal form)
- n = Compounding Frequency per year
- t = Remaining time for each deposit (in years)
How RD Differs from FD
Unlike a Fixed Deposit where you invest a lump sum once, RD requires monthly deposits. This makes it ideal for salaried individuals who want to build savings gradually. Each deposit earns interest from its deposit date until maturity.
RD Interest Rates in India
Indian banks typically offer RD interest rates between 5% to 7.5% depending on tenure and bank. Senior citizens usually get an additional 0.25% to 0.50% higher rate. Post office RD rates are set by the government and revised quarterly.
Tax on RD Interest
RD interest is fully taxable as per your income tax slab. TDS at 10% is deducted if total interest across all FDs and RDs exceeds ₹40,000 per year (₹50,000 for senior citizens).
Example RD Calculation
Let's calculate the maturity amount for a typical Indian bank RD:
Given Values
- Monthly Deposit (P): ₹5,000
- Interest Rate (r): 7% per annum
- Tenure: 5 years (60 months)
- Compounding: Quarterly (n = 4)
Step-by-Step Calculation
-
Total Investment:
₹5,000 × 60 months = ₹3,00,000 -
First deposit (Month 1):
Earns interest for 5 years (60 months)
= ₹5,000 × (1 + 0.07/4)^(4×5) = ₹7,073 -
Last deposit (Month 60):
Earns interest for ~0.08 years (1 month)
= ₹5,000 × (1 + 0.07/4)^(4×0.083) = ₹5,029 -
Sum all deposits with interest:
Maturity = Sum of each deposit's future value
= ₹3,60,610
Result
- Total Investment: ₹3,00,000
- Interest Earned: ₹60,610
- Maturity Amount: ₹3,60,610
Your monthly deposits of ₹5,000 over 5 years grow to ₹3,60,610 with quarterly compounding.
Quick Answers
What is a Recurring Deposit?
A Recurring Deposit is a savings product where you deposit a fixed amount every month for a fixed tenure. In India, RD interest is typically compounded quarterly and paid at maturity.
How is RD maturity calculated?
RD maturity is calculated using the future value of a series of monthly deposits with quarterly compounding. The formula uses monthly instalment, interest rate, tenure, and compounding frequency.
Is RD interest taxable in India?
Yes. RD interest is taxable as income under “Income from other sources” and is added to your total income. TDS may apply if interest exceeds the prescribed limit in a financial year.
What is the minimum RD amount in India?
Most Indian banks allow RD starting from ₹100 to ₹500 per month. Post office RD can be opened with ₹100 per month.
RD vs FD: what is the difference?
FD is a lump-sum deposit for a fixed period; RD is a fixed monthly deposit for a fixed period. RD suits regular savers; FD suits those with a lump sum.
Frequently Asked Questions
What is the minimum amount for RD in India?
Most Indian banks allow you to start an RD with a minimum of ₹100 to ₹500 per month. Post office RD can be opened with just ₹100 per month. Some banks offer flexible RD schemes where you can vary your monthly deposit amount.
Can I withdraw RD before maturity?
Yes, premature withdrawal of RD is allowed, but you'll face a penalty of 1% to 2% reduction from the applicable interest rate. Some banks may also have a minimum lock-in period (usually 3 months). The interest is recalculated at the reduced rate for the period held.
What happens if I miss an RD installment?
If you miss an RD installment, most banks charge a penalty of ₹1 to ₹2 per ₹100 of deposit per month of default. If you miss multiple installments (typically 3-6 consecutive months), the RD account may be closed prematurely or converted to an FD.
Is RD better than SIP for savings?
RD offers guaranteed returns with capital protection, making it ideal for risk-averse investors. SIP invests in mutual funds with potentially higher returns but also market risk. For short-term goals (1-3 years) or emergency funds, RD is safer. For long-term wealth creation (5+ years), SIP typically outperforms RD.
Can I get a loan against my RD?
Yes, most banks offer loans against RD up to 80-90% of the deposited amount. The interest rate on such loans is typically 1-2% higher than the RD interest rate. This allows you to meet emergency expenses without breaking your RD prematurely.