How to use this RD calculator
- Enter your monthly deposit, the amount debited each month.
- Enter the interest rate your bank or post office quotes for the tenure.
- Set the tenure in months: 12 for one year, 60 for five.
- Open "More options" to pick your tax slab and see the interest you keep after tax.
How RD interest works
An RD is a fixed deposit built up one month at a time. Bank RDs usually compound interest every quarter, and each instalment earns only for the months it stays in: your first instalment earns for the full tenure, your last for just one month. That's why the interest on an RD is roughly half of what the same total would earn in an FD over the same period.
M = Σ R × (1 + r/400)m/3 R is the monthly instalment, r the yearly rate and m the months each instalment stays in, from the full tenure for the first down to 1 for the last. Part-quarters count as fractions.
Worked example
You deposit ₹5,000 a month for 60 months (5 years) at 7%. You put in ₹3,00,000, and the maturity value is ₹3,59,664, so ₹59,664 is interest, 19.9% on top of your deposits.
Adding ₹1,000 a month would raise the maturity value by ₹71,933. Keeping the RD going for one more year would take it to ₹4,47,820.
RD maturity by tenure
₹5,000 a month at 7%:
| Tenure | You deposit | Maturity value | Interest |
|---|---|---|---|
| 12 months | ₹60,000 | ₹62,311 | ₹2,311 |
| 24 months | ₹1,20,000 | ₹1,29,099 | ₹9,099 |
| 36 months | ₹1,80,000 | ₹2,00,686 | ₹20,686 |
| 60 months | ₹3,00,000 | ₹3,59,664 | ₹59,664 |
| 120 months | ₹6,00,000 | ₹8,68,509 | ₹2,68,509 |
Interest grows much faster than the deposits: doubling the tenure from 5 to 10 years more than quadruples the interest.
RD, FD or SIP?
- RD: a fixed rate on money you save each month. Good for a short-term goal you want to reach with certainty.
- FD: a fixed rate on a lump sum, which earns more than an RD with the same total because it is all invested from the start. See the FD calculator.
- SIP: monthly investing in mutual funds, with market-linked returns that are not guaranteed but may be higher over long periods. See the SIP calculator.
Saving towards a specific amount by a date? The savings goal calculator works backwards from your target.
Tax, TDS and safety
RD interest is taxed at your slab rate plus 4% cess. Banks deduct TDS at 10% (with PAN) when your interest from that bank, counting RDs and FDs together, exceeds ₹50,000 in a financial year, or ₹1 lakh for senior citizens. Deposits are insured by DICGC up to ₹5 lakh per depositor per bank, including interest. Banks round and credit interest in their own way, so your bank's maturity figure may differ by a few rupees.
Frequently asked questions
How is RD interest calculated?
What is the maturity value of ₹5,000 a month RD for 5 years?
Is an RD better than an FD?
Is RD interest taxable?
Is a recurring deposit safe?
What happens if I miss an RD instalment?
Sources and further reading
Independent, official guidance on this topic. Rules differ by country, so check the regulator where you live.
- Reserve Bank of India: regulations, notifications and consumer awareness · Reserve Bank of India
- Deposit insurance on bank deposits · Deposit Insurance and Credit Guarantee Corporation (RBI)
- Post office savings schemes, including PPF and RD · India Post
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.