RD Calculator

Recurring Deposit (RD) Defined

A Recurring Deposit (RD) allows you to save a fixed amount every month with a bank for a fixed tenure, earning interest rates similar to Fixed Deposits.

Why use an RD?

• Disciplined Savings: Forces you to save a small amount monthly.
• Guaranteed Returns: Interest rates are fixed at the time of opening.
• Higher Rates: Senior citizens often get 0.5% extra.

Formula Used

RD interest is compounded quarterly in most Indian banks. Our calculator uses the accurate quarterly compounding formula on your monthly installments to give you the precise maturity value.

How the RD Calculator Helps

An RD calculator is useful when you want to build a fixed corpus from monthly savings. Instead of investing a lump sum like an FD, a recurring deposit lets you deposit a fixed amount every month and earn a pre-decided interest rate.

Use this calculator to estimate:

• Final maturity amount
• Total deposits made
• Interest earned
• Difference between short and long tenures
• Impact of a higher or lower interest rate

RD Interest Calculation

Recurring deposit interest is usually compounded quarterly, but every monthly installment remains invested for a different number of months. The first installment earns interest for the full tenure, while the final installment earns interest only for the remaining period.

That is why RD maturity cannot be estimated accurately by simply multiplying the monthly deposit by tenure and applying one flat interest rate. A proper RD calculator compounds each installment based on how long it remains invested.

RD vs SIP

Feature	Recurring Deposit	Mutual Fund SIP
Return	Fixed	Market-linked
Risk	Low	Depends on fund type
Best for	Short/medium-term safe goals	Long-term wealth creation
Liquidity	Premature withdrawal rules apply	Usually flexible, exit load may apply
Taxation	Interest taxable	Depends on fund type and holding period

An RD can be better for a known goal such as school fees, insurance premium planning, or a travel fund. A SIP can be better for long-term goals where you can tolerate volatility.

RD Planning Tips

1. Match RD tenure with your goal date.
2. Compare post-tax return, not just bank interest rate.
3. Avoid breaking RDs frequently, because premature closure may reduce returns.
4. Use RD for disciplined savings if you struggle to keep money aside.
5. For long-term goals above five years, compare RD with PPF, SIP, and hybrid funds.

Frequently Asked Questions

Is RD interest fixed?

Yes. The interest rate is usually fixed at the time of opening the recurring deposit.

Is RD interest taxable?

Yes. RD interest is taxable as per your income tax slab.

Which is better, RD or FD?

FD is better when you already have a lump sum. RD is better when you want to save monthly.

Can I withdraw RD before maturity?

Most banks allow premature closure, but they may charge a penalty or apply a lower interest rate.