Recurring Deposit (RD) Calculator
Recurring Deposits are perfect for building a savings habit without a large initial lump sum. Calculate your future wealth today.
Recurring Deposit
₹1,28,425
RD interest rates are generally similar to Fixed Deposit rates of the same tenure.
This calculation assumes quarterly compounding as per Indian banking standards. Final maturity values may differ slightly based on your bank's specific formula.
Benefits of Recurring Deposits
RDs allow you to invest small amounts monthly while earning interest rates comparable to Fixed Deposits. They are ideal for short-to-medium term goals like vacations, gadget purchases, or emergency funds.
Discipline
Forces a monthly savings habit with a fixed commitment.
Low Entry
Start with as little as ₹500 or ₹1,000 per month.
Guaranteed Returns
The interest rate is locked at the time of opening the RD.
How to use the RD Calculator?
- Monthly Deposit: Set the amount you wish to save every month.
- Interest Rate: Enter the annual rate offered by your bank (Standard is 6% - 7.5%).
- Tenure: Choose the number of months you want to save for (usually 6 to 120 months).
- Maturity Value: Instantly see how much you will get back at the end of the period.
RD vs FD: Which is Better for You?
Choosing between an RD and FD depends on whether you have a lump sum to invest or want to build savings monthly:
- Choose FD if: You have a large surplus amount, want maximum returns on a one-time investment, and don't need monthly liquidity.
- Choose RD if: You want to build a savings habit, invest a fixed monthly amount (like a salary component), and want flexibility in tenure.
- Interest rates for RD are usually 0.25-0.50% lower than FD rates for the same tenure at the same bank.
Current RD Interest Rates 2026
- SBI RD: 6.5% – 7.0% (general); 7.0% – 7.5% (senior citizens)
- HDFC Bank RD: 6.6% – 7.1% (general); 7.1% – 7.6% (senior citizens)
- Post Office RD (5-year): 6.7% (compounded quarterly)
- Note: Rates change quarterly. Always verify with your bank before opening an RD.
Tax on RD Interest: What You Need to Know
Unlike PPF, RD interest is fully taxable. Banks deduct TDS (Tax Deducted at Source) at 10% if annual interest exceeds ₹40,000. You must declare RD interest income in your Income Tax Return under 'Income from Other Sources', even if TDS was not deducted (interest below threshold).
Tip: Submit Form 15G (or 15H for senior citizens) at the start of each financial year to your bank if your total income is below the taxable limit — this prevents TDS deduction on your RD interest.
Frequently Asked Questions
What is a Recurring Deposit (RD)?
An RD is a type of term deposit offered by banks in India that allows you to deposit a fixed amount every month for a pre-determined period and earn interest similar to a Fixed Deposit.
How is RD interest calculated?
In India, RD interest is usually compounded quarterly. Banks use the formula for maturity value as prescribed by the RBI, which accounts for the monthly installments and the compounding effect.
Can I change the monthly RD amount?
No, once an RD account is opened, the monthly installment amount cannot be changed during the tenure of the deposit.
What is the formula for RD maturity amount?
RD maturity is calculated using compound interest: M = R × [(1 + i)^n - 1] / (1 - (1 + i)^(-1/3)), where R is monthly deposit, i is quarterly interest rate (annual rate / 400), and n is tenure in quarters. Most banks compound quarterly.
Is RD interest taxable?
Yes, interest earned on Recurring Deposits is fully taxable as per your income tax slab. TDS at 10% is deducted if total interest across all deposits with the bank exceeds ₹40,000 in a year (₹50,000 for senior citizens). You must disclose RD interest in your ITR under 'Income from Other Sources'.
What happens if I miss an RD installment?
Missing an RD installment attracts a penalty. Most banks charge ₹1-2 per ₹100 per month of default (e.g., SBI charges ₹1.50 per ₹100). If you miss 3-4 installments continuously, the bank may prematurely close your RD account.
Can I withdraw an RD before maturity?
Yes, premature withdrawal is allowed but usually with a penalty of 0.5% to 2% reduction in interest rate. Some banks do not allow withdrawal for the first 3 months. Post Office RDs allow premature closure after 3 years.
What is the current Post Office RD interest rate?
As of 2026, the Post Office Recurring Deposit (5-year scheme) offers 6.7% per annum with quarterly compounding. This rate is reviewed by the Ministry of Finance every quarter and is generally higher than bank rates for similar tenures.