Recurring Deposit (RD) Calculator
Estimate the maturity value of your recurring deposit.
Approximate (monthly compounding). Banks may compound quarterly.
What Is a Recurring Deposit (RD) Calculator?
A Recurring Deposit (RD) is a savings instrument offered by banks and post offices that lets you deposit a fixed amount every month for a chosen tenure, earning a fixed rate of interest. It is ideal for salaried individuals who want to build a corpus through small, disciplined monthly savings.
An RD Calculator instantly tells you the maturity amount you will receive and the total interest earned, based on your monthly deposit, the interest rate and the tenure. Because each instalment earns interest for a different length of time, calculating RD maturity by hand is tedious — the calculator handles it in seconds.
RD Maturity Formula
RD interest is typically compounded quarterly. The maturity amount is the sum of each monthly instalment compounded from the month it is deposited until maturity. The standard formula used by banks is:
M = P × [(1 + i)n − 1] ÷ [1 − (1 + i)−1/3]
where the rate is adjusted for quarterly compounding. A simpler way to express RD maturity is to compound each instalment individually:
M = Σ P × (1 + r/4)(4 × t)
Where:
- P = fixed monthly deposit
- r = annual interest rate (as a decimal)
- t = time each instalment stays invested (in years)
- n = total number of months
Your total interest is simply maturity amount − total amount deposited.
Worked Example
Suppose you deposit ₹5,000 every month for 5 years (60 months) at an assumed interest rate of 6.5% per annum, compounded quarterly (always verify the current RD rate with your bank).
Total amount deposited = ₹5,000 × 60 = ₹3,00,000.
Each instalment is compounded quarterly from the month it is paid until the end of 60 months. The first ₹5,000 earns interest for the full 5 years, while the last instalment earns it for just one month. Adding up all 60 compounded instalments gives a maturity value of approximately ₹3,54,956.
So your total interest earned is about ₹54,956 — and you achieved it simply by saving ₹5,000 a month. Our RD Calculator computes this instantly; just plug in your monthly deposit, rate and tenure.
Benefits and Things to Keep in Mind
Recurring Deposits are popular for good reasons, but there are a few points to remember:
- Guaranteed returns: Unlike market-linked products, RDs offer a fixed, predictable return — there is no market risk.
- Disciplined saving: The fixed monthly commitment helps build a savings habit.
- Interest is taxable: RD interest is added to your income and taxed at your slab rate. TDS may apply if interest crosses the threshold in a year.
- Flexible tenure: RDs usually range from 6 months to 10 years, so you can match the tenure to your goal.
- Penalty on missed deposits: Missing monthly instalments may attract a small penalty, so set up an auto-debit to stay on track.
Frequently Asked Questions
RD interest is usually compounded quarterly. Each monthly instalment earns interest from the month it is deposited until maturity, so earlier deposits earn more. The maturity amount is the sum of all compounded instalments, and the interest is the maturity amount minus the total you deposited.
Yes. Interest earned on a Recurring Deposit is fully taxable and is added to your total income, taxed as per your applicable income tax slab. Banks may deduct TDS if the total interest in a financial year exceeds the prescribed limit.
RD interest rates vary by bank and tenure and change from time to time. As an example, rates have recently ranged from around 6% to 7.5% per annum, with senior citizens often getting a slightly higher rate. Always verify the current rate with your bank or post office before calculating.
Most banks allow premature withdrawal of an RD, but it usually attracts a penalty and a slightly lower interest rate than originally promised. Some banks may not permit partial withdrawals, so check your bank's specific terms.
Missing an instalment typically results in a small penalty charged by the bank. Repeated defaults may lead to the account being closed prematurely. Setting up a standing instruction or auto-debit helps you avoid missed payments.
In a Fixed Deposit you invest a single lump sum once, whereas in a Recurring Deposit you invest a fixed amount every month. Both offer guaranteed returns, but an RD suits those saving regularly from monthly income, while an FD suits those with a lump sum to invest.