How the RD calculation works
The Recurring Deposit (RD) calculator helps you estimate the maturity amount and interest earned on your monthly deposits. The formula used is:
Maturity Amount = P × n + P × n(n+1)/2 × r/400
where P = monthly deposit, n = number of months, r = annual interest rate
- Interest is compounded quarterly as per Indian banking standards.
- Changing the deposit, rate, or tenure updates the results instantly.
- This tool is for estimation only. Actual returns may vary by bank.
RD terms explained
- Recurring Deposit (RD)
- A recurring deposit is a special kind of term deposit offered by banks in India which helps people with regular incomes to deposit a fixed amount every month into their recurring deposit account and earn interest at the rate applicable to fixed deposits.
- Monthly Installment
- The fixed amount you deposit every month into your RD account.
- Interest Rate
- The annual rate at which your RD earns interest, compounded quarterly.
- Tenure
- The total period (in months) for which you make monthly deposits.
- Maturity Amount
- The total amount you receive at the end of the RD tenure, including both your deposits and the interest earned.
Smart RD tips
- Start Early: The earlier you start, the more you benefit from compounding interest.
- Choose Tenure Wisely: Pick a tenure that matches your savings goal and liquidity needs.
- Check Bank Rates: Interest rates vary by bank. Compare before opening an RD.
- Avoid Premature Withdrawals: Withdrawing before maturity may result in penalties and lower interest.
- Automate Deposits: Set up auto-debit to never miss a monthly installment.
Frequently asked questions
How is RD interest calculated?
RD interest is compounded quarterly. Formula: M = R × [(1 + i)^n – 1] / (1 – (1 + i)^(-1/3)), where R = monthly deposit, i = quarterly interest rate, n = tenure in quarters. For example, ₹5,000/month at 7% for 2 years gives approximately ₹1,29,500 at maturity.
What is the RD interest rate in 2026?
Current RD rates: SBI: 6.5–7%, HDFC Bank: 6.6–7.1%, Post Office (PORD): 6.7% for 5 years, ICICI: 6.7–7.1%. Senior citizens get 0.25–0.5% extra in most banks. Post Office RD runs for exactly 5 years.
Is RD interest taxable?
Yes, RD interest is fully taxable as per your income tax slab — same as FD. TDS applies if total interest from all RD accounts with a bank exceeds ₹40,000 per year (₹50,000 for senior citizens). Submit Form 15G/15H to avoid TDS if total income is below taxable limit.
What happens if I miss an RD instalment?
Banks charge a penalty for missed RD instalments — typically ₹1–2 per ₹100 per month of delay. Post Office RD charges 2 paise per ₹5 per month for default. If you miss too many instalments, the RD may be closed prematurely with a penalty on interest earned.
Can I withdraw RD before maturity?
Premature withdrawal is allowed after 3 months (in most banks). A penalty of 1–2% is deducted from the applicable rate for the period the deposit was held. Post Office RD allows premature closure after 3 years with penalty. Tax Saver RD variants (if any) have lock-in conditions.
What is the difference between RD and SIP?
RD (Recurring Deposit) is a bank product with fixed guaranteed returns (6–7.5%) and capital protection. SIP is a mutual fund product with market-linked returns (historically 10–15% for equity funds) but comes with risk. RD is better for short-term safe savings; SIP for long-term wealth creation.