RD Calculator for Recurring Deposits

How the RD calculator works out maturity

Each monthly instalment is treated like a small FD that starts on the day you pay it. The first instalment earns interest for the full tenure, the last one for just one month. Interest is compounded every quarter. The rd interest calculator adds up all these pieces:

Banks often show this as the single formula M = R × ((1 + i)^n − 1) ÷ (1 − (1 + i)^(−1/3)), with i = r/400 and n the number of quarters. Both give the same result. For ₹5,000 a month at 7% for 24 months the maturity value is ₹1,29,099, of which ₹9,099 is interest.

RD returns for common amounts

Notice that 12 months at ₹10,000 and 24 months at ₹5,000 both deposit ₹1.2 lakh, but the longer RD earns almost twice the interest, because money stays in longer. Change the months in the recurring deposit interest calculator to match the date you need the money. For a yearly rd calculator view, read the table rows, and for any rd account calculator check, the bank's passbook should match within a few rupees.

RD vs FD: which earns more

For the same rate, an FD of the whole amount on day one earns more than an RD, because all the money is in from the start. ₹1,20,000 in a 2 year FD at 7% grows to about ₹1,38,000, while ₹5,000 a month in an RD reaches ₹1,29,099. But that comparison only matters if you have the lump sum. An RD is for money you have not earned yet.

A common approach is an RD for monthly saving, then a fresh FD from the RD's maturity amount. The FD calculator shows what the second step adds.

Bank RD or post office RD

The post office runs a 5 year RD at a rate set by the government each quarter, currently 6.7% a year. Banks offer many tenures and set their own rates; some pay more than the post office, some less. A ₹1,000 a month post office RD grows to about ₹71,366 in 5 years.

Use the post office RD calculator for India Post accounts. Bank RDs fall under DICGC insurance; post office deposits carry a sovereign guarantee.

Rules that change your RD amount

• Late instalments: banks charge a small penalty, usually a fixed rupee amount per ₹100 per month of delay. Several missed instalments can lead to the account being closed.
• Premature closure: allowed at most banks with a penalty of 0.5% to 1% on the rate, like an FD. See the premature withdrawal calculator.
• Senior citizens usually get the same extra rate as on FDs.
• TDS: RD interest counts with FD interest at the same bank for the TDS limit.

Tax on RD interest

Interest on an RD is taxable every year at your slab rate, even though you receive it only at maturity. Banks deduct TDS once your total deposit interest at that bank passes the yearly limit. Below the taxable income level, a yearly declaration given to the bank prevents TDS. Your after tax return is roughly the rate × (1 − your tax slab). At a 20% slab, 7% becomes about 5.6%.

For a monthly habit with tax free returns, look at the PPF calculator. For a market linked monthly plan, see the SIP calculator, remembering that a fund's value is never locked in.