What is a RD Calculator?
A recurring deposit lets you build up a fixed-income investment through equal monthly instalments rather than one lump sum, which suits regular savers more than a lump-sum FD. Like most Indian bank FDs, RD interest is compounded quarterly on the running balance, even though deposits happen monthly.
Enter your monthly instalment, the interest rate and the tenure to see the maturity value and how much of it is your own money versus interest earned.
How the maturity value is calculated
This calculator simulates the RD month by month with quarterly compounding on the running balance — a transparent way to arrive at the same maturity value banks quote, including a proportional adjustment for any trailing partial quarter.
Worked example: RD vs. an equivalent FD lumpsum
Deposit ₹5,000 a month for 5 years at 6.7% (a typical bank RD rate), and total deposits of ₹3,00,000 grow to roughly ₹3,58,807 at maturity — about ₹58,807 in interest. Compare that to what the same ₹3,00,000 would have earned as a single FD lumpsum, deposited on day one at the identical 6.7% rate: roughly ₹4,18,220. The RD earns meaningfully less interest on the same total money, purely because most of it arrives gradually rather than all at once — each monthly instalment only compounds for the months remaining after it’s deposited, not the full 5 years.
This isn’t a flaw in RD — it’s simply the honest cost of not having ₹3,00,000 available as a lumpsum in the first place. An RD is the right tool for building that amount gradually; it was never going to out-earn a lumpsum FD funded by money you don’t yet have.
RD vs. SIP for the same monthly amount
Both an RD and a SIP take a fixed monthly instalment, but they sit at opposite ends of the risk spectrum. An RD’s rate is fixed and guaranteed for the full tenure. A SIP into an equity mutual fund has no guaranteed rate — it could do considerably better or considerably worse than an RD over the same period, depending on market performance. Many people use both: RD (or a similar fixed-income tool) for a goal within the next 1–3 years where certainty matters more, and SIP for a goal 7+ years out where there’s time to ride out market volatility.
Frequently asked questions
Can I change the instalment amount later?
No — a standard RD requires equal monthly instalments for the full tenure; missing a payment usually attracts a small penalty rather than being adjusted for.
Is RD interest taxable?
Yes, fully taxable at your slab rate like FD interest, and TDS applies once interest crosses the applicable annual threshold across your deposits with that bank.
RD or SIP — which grows faster?
An RD gives a fixed, guaranteed rate; a mutual fund SIP has no guaranteed rate but has historically outpaced RD returns over long horizons, in exchange for market risk. They serve different jobs in a portfolio.
What’s the minimum and maximum RD tenure?
Most banks offer RD tenures from 6 months to 10 years, though the exact range varies by bank — check your specific bank’s RD product terms.
Can I withdraw an RD before maturity?
Yes, most banks allow premature closure, usually with a lower interest rate applied for the actual period held plus a small penalty — similar in principle to breaking an FD early.
Do post office RDs work the same way as bank RDs?
The mechanics are similar (fixed monthly instalment, quarterly compounding), though the Post Office RD is a distinct product with its own government-notified rate, separate from any individual bank’s RD rate.
Can I take a loan against my RD?
Yes — many banks allow a loan or overdraft against an RD’s accumulated balance, similar to an FD, typically up to a percentage of the balance built so far.