RD Calculator
Recurring Deposit Calculator. Calculate maturity amount for your monthly deposits.
Total Invested
₹3,00,000
Total Interest
₹59,664
Maturity Amount
₹3,59,664
How the RD Calculator works
Reviewed by Dinesh Babu · Last updated July 2026
A Recurring Deposit (RD) lets you deposit a fixed amount every month for a set term at a fixed interest rate — ideal for turning a monthly income into disciplined savings. This calculator estimates the maturity value and total interest across all your instalments. Like FDs, RD interest is usually compounded quarterly.
The key mechanic is that each monthly instalment earns interest only for its remaining tenure. Your first deposit earns interest for the whole term, but your last deposit earns interest for just one month. That is why the total interest on an RD is less than on a single FD of the same total amount and rate.
RD maturity (each instalment compounded)
M = Σ P × (1 + r/4)^(4 × tᵢ)
P = monthly instalment, r = annual rate, tᵢ = remaining time (in years) for each instalment. Interest is usually compounded quarterly.
RD is about habit, not maximum return
An RD's strength is behavioural: it forces a fixed monthly saving with almost no risk. It will always earn less interest than an equivalent lump-sum FD, so choose an RD when you are saving out of monthly income and do not yet have the lump sum. Once you have accumulated a corpus, an FD or other instrument may serve better.
Tax treatment mirrors FDs
- RD interest is fully taxable at your income slab, just like an FD.
- TDS applies if your total deposit interest at the bank crosses ₹40,000 a year (₹50,000 for seniors); give your PAN to avoid the 20% rate.
- Submit Form 15G/15H if your income is below the taxable limit to prevent TDS.
| Feature | Recurring Deposit (RD) | Fixed Deposit (FD) |
|---|---|---|
| How you fund it | Fixed amount every month | One lump sum upfront |
| Interest earned | Less (later instalments earn less) | More (whole sum earns full term) |
| Best suited to | Saving from monthly salary | A lump sum you already hold |
| Tax | Slab rate + TDS | Slab rate + TDS |
₹5,000 a month for 3 years at 7%
Saving ₹5,000 every month for 3 years (₹1,80,000 total) at 7% p.a. compounded quarterly matures to about ₹2,00,500 — roughly ₹20,500 of interest. Notice the interest is lower than a ₹1,80,000 lump-sum FD would earn, because later instalments were invested for less time.
Why an FD earns more on the same money
If you instead had ₹1,80,000 upfront and put it in a 3-year FD at 7%, it would earn about ₹42,000 — more than double the RD's interest — because the entire sum earns for the full 3 years. RD wins only when you do not have the lump sum to begin with.
Common mistakes to avoid
- Expecting an RD to earn as much as an FD of the same total — it earns less because later instalments are invested for a shorter time.
- Missing monthly instalments, which usually attracts a small penalty and can affect maturity.
- Assuming RD interest is tax-free — it is taxed at your slab like an FD.
- Forgetting Form 15G/15H when your income is below the taxable limit.
Frequently asked questions
How is RD interest calculated?+
Each monthly instalment earns interest (usually compounded quarterly) for the time it remains invested. The first instalment earns for the full term and the last for only a month; all instalments plus their interest are summed at maturity.
Why does an RD earn less interest than an FD?+
In an RD your money goes in gradually, so later instalments earn interest for a shorter period. In an FD the entire lump sum earns for the full term from day one. For the same total money and rate, an FD always earns more.
Is RD interest taxable?+
Yes. RD interest is added to your income and taxed at your slab, exactly like FD interest. TDS may be deducted if your total deposit interest at that bank crosses the annual threshold.
When does TDS apply on an RD?+
When your combined deposit interest at the bank exceeds ₹40,000 in a year (₹50,000 for senior citizens), the bank deducts 10% TDS with PAN, or 20% without. You can adjust or reclaim it when filing your return.
Can I withdraw an RD early?+
Yes, though premature closure attracts a penalty and the interest is recalculated at a lower rate for the actual period held, similar to an FD.
What happens if I miss a monthly instalment?+
Most banks charge a small penalty for a missed instalment, and repeated defaults can lead to premature closure of the RD. It is best to keep the funding account topped up for auto-debit.
RD or SIP in a mutual fund — which is better?+
An RD gives a fixed, guaranteed return with no market risk but modest, taxable interest. An equity SIP can earn more over the long term but its returns are market-linked and not guaranteed. RD suits short-term, safety-first goals; SIP suits long-term wealth building.