fincalculatorRecurring Deposit (RD) Calculator
Estimate the maturity value of your monthly savings. Accurate Recurring Deposit calculator for Post Office and Bank RDs.
A Recurring Deposit (RD) is a disciplined savings tool offered by banks and Post Offices in India. It is ideal for salaried individuals who want to invest a fixed portion of their income every month but want guaranteed returns without market risk.
Think of an RD as a "Monthly FD". Instead of investing a lump sum once, you invest small amounts monthly, and each installment earns interest until maturity. Our RD Calculator helps you visualize how these small monthly contributions snowball into a large corpus.
Why use an RD Calculator?
Calculating RD returns manually is extremely difficult. Why? Because the money you deposit in the first month earns interest for 12 months, the money in the second month earns for 11 months, and so on.
Our calculator automates this complex math using the industry-standard quarterly compounding formula, giving you accurate results instantly.
Who Should Open an RD?
- Goal Planners: If you need ₹2 Lakhs for a vacation or down payment in 2 years, RD is perfect.
- Students/Beginners: Start saving with just ₹500/month.
- Low Risk Takers: It offers the safety of an FD with the flexibility of monthly payments.
RD Calculation Formula
The formula used by banks (quarterly compounding) is:
(Note: This is a generalized representation. Banks essentially compound interest on each installment individually.)
Where:
- M = Maturity Value
- P = Monthly Installment
- n = Number of quarters
- r = Annual Interest Rate
Calculate RD Returns
Invested Amount
₹ 0
Total Interest
₹ 0
Maturity Value
₹ 0
Example Calculation
Scenario: You decide to save ₹5,000 per month in an RD for 3 years at an interest rate of 7% p.a.
- Total Investment: ₹5,000 × 36 months = ₹1,80,000
- Interest Earned: Approx ₹21,000
- Maturity Value: ₹2,01,000
This is significantly safer than keeping money in a savings account which earns only 3-4%.
RD vs Mutual Fund SIP
Both involve monthly investments, but they are very different:
| Parameter | Recurring Deposit (RD) | SIP (Equity Mutual Fund) |
|---|---|---|
| Risk | Zero Risk | Market Risk |
| Returns | Fixed (6-7.5%) | Variable (12-15% expected) |
| Tenure | Fixed (e.g. 1 year) | Flexible (Anytime exit) |
Frequently Asked Questions (FAQs)
How is RD interest calculated?
RD interest is compounded quarterly. The formula is complex as each installment earns interest for a different duration (N, N-1, N-2 months...). Our calculator handles this intricate math for you based on standard banking formulas.
Is RD interest taxable?
Yes, just like FDs, the interest earned on RDs is added to your total income and taxed as per your slab. TDS is also applicable on RD interest if it exceeds ₹40k/year (₹50k for seniors).
Can I miss an RD installment?
If you miss an installment, the bank may charge a penalty or reduce the interest payable. If you miss multiple payments, the account might be closed prematurely.
Is Post Office RD better than Bank RD?
Post Office RDs are sovereign-backed and safe. Their rates are revised quarterly by the government. Sometimes they offer better rates than large banks, but bank RDs offer more flexibility in tenure (6 months to 10 years) compared to Post Office (5 years fixed).
What is the minimum amount for RD?
Most banks allow you to start an RD with as little as ₹500 or ₹1000 per month. Post Office RD can be started with ₹100.