RD Calculator

A recurring deposit (RD) lets you save a fixed amount every month with a bank or post office and earn a fixed interest rate. It works like a series of small fixed deposits, one opened each month, all maturing on the same date. This calculator uses the method Indian banks follow: each instalment earns interest compounded quarterly from the month it is deposited until maturity.

How to use this calculator

1. Enter the monthly instalment (for example, ₹5,000).
2. Enter the annual interest rate offered by your bank or the post office.
3. Enter the tenure in months or years.
4. Read the total deposited, the interest earned and the maturity value.

Formula

Each instalment is compounded quarterly for the months it remains invested, and the results are added together:

M = Σ P × (1 + r/400)^(m/3),  for m = 1 to N

• M = maturity value
• P = monthly instalment
• r = annual interest rate in percent (so r/400 is the quarterly rate)
• N = total number of monthly instalments
• m = months a given instalment stays invested (the first instalment stays N months, the last stays 1 month)
• m/3 = that period expressed in quarters

The same sum can be written in closed form, with q = 1 + r/400:

M = P × (q^(N/3) − 1) / (1 − q^(−1/3))

Worked example

You deposit ₹5,000 a month for 5 years (60 instalments) at 7% a year.

• Quarterly rate = 7 ÷ 400 = 0.0175, so q = 1.0175
• The first instalment grows for 60 months (20 quarters): 5,000 × 1.0175^20 ≈ ₹7,074
• The last instalment grows for 1 month: 5,000 × 1.0175^(1/3) ≈ ₹5,029
• Adding all 60 instalments: M ≈ ₹3,59,664

The interest is much smaller than on a ₹3 lakh FD for five years, because the average instalment is invested for only about half the tenure.

Things to keep in mind

• Bank convention. Most Indian banks and India Post compound RD interest quarterly. A few calculators use monthly compounding or end-of-month deposits, which give slightly different numbers. Your bank's passbook or maturity advice is the final figure.
• Fixed rate. The rate is locked when you open the RD and does not change with later rate moves. Senior citizens usually get an extra 0.25% to 0.50% at banks.
• TDS. RD interest is counted together with FD interest at the same bank. For FY 2026-27, TDS applies when the total exceeds ₹50,000 in a financial year (₹1 lakh for senior citizens), at 10% with PAN. If your total tax is nil, you can submit Form 121, which replaces Forms 15G and 15H under the Income-tax Act 2025.
• Tax. RD interest is taxable at your slab rate each year on an accrual basis. TDS is an advance payment, not the final tax.
• Missed instalments. Late payments attract a penalty and reduce the maturity value. Several missed instalments can lead to closure of the account.
• Premature closure. Banks usually pay a reduced rate if the RD is closed early.
• Deposit insurance. Bank RDs are covered by DICGC insurance up to ₹5 lakh per depositor per bank, along with your other deposits there.

The figures are estimates for planning. They are not investment advice.