RD Calculator
Calculate your recurring deposit maturity value with quarterly compounding. See how your monthly savings grow over time at current bank rates.
Last updated: 2026-03-28
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Important: This calculator provides estimates based on the inputs and assumptions you provide. Results are mathematical projections, not financial advice or recommendations. Actual outcomes will vary based on market conditions, policy changes, individual circumstances, and factors not captured by this tool. Verify all figures independently and consult qualified professionals before making financial decisions.
How a Recurring Deposit Works
A Recurring Deposit (RD) lets you save a fixed amount every month for a predetermined tenure, earning compound interest on each installment. It's ideal for salaried individuals who want to build a corpus gradually without taking any market risk. RDs are available at banks, post offices, and some NBFCs with tenures ranging from 6 months to 10 years.
Quarterly Compounding on RD
Indian banks compound RD interest quarterly. This means every three months, the accrued interest is added to the principal, and future interest is calculated on this increased amount. Each monthly installment earns interest for a different duration — your first installment earns interest for the full tenure, while the last installment earns interest for only one month. The maturity value is the sum of each installment compounded for its respective remaining period.
RD vs SIP — Which Is Better?
Both involve disciplined monthly investing, but they serve different purposes. An RD gives guaranteed returns (typically 6% to 7.5%) with zero risk — your principal is safe and insured up to &rupee;5 lakh. A SIP in equity mutual funds has historically delivered 12% to 15% annualised returns over long periods but comes with market volatility and no capital guarantee. For goals less than 3 years away, RDs are safer. For goals 5+ years away, SIPs typically outperform due to the power of compounding at higher rates.
RD Tax Treatment
Interest earned on RDs is added to your total income and taxed at your applicable slab rate. Banks deduct TDS at 10% if your total deposit interest exceeds &rupee;40,000 in a financial year (&rupee;50,000 for senior citizens). Unlike tax-saving FDs, there is no RD scheme that qualifies for Section 80C deduction. To optimise taxes, consider investing in PPF or ELSS SIPs instead if you need Section 80C benefits alongside monthly investing.
Frequently Asked Questions
How is RD maturity amount calculated?
RD maturity is calculated using quarterly compounding. Each monthly installment earns compound interest for the remaining tenure. The formula accounts for each deposit separately, compounding quarterly, and the total maturity value is the sum of all these compounded installments.
What happens if I miss an RD installment?
If you miss an RD installment, most banks charge a penalty of ₹1 to ₹2 per ₹100 per month of default. If installments are missed for more than 3–6 consecutive months, the bank may prematurely close the RD. Some banks allow you to pay the missed installments with a penalty and continue the RD.
Can I withdraw my RD before maturity?
Yes, you can prematurely close an RD, but the bank will apply a penalty (typically 0.5% to 1% lower interest rate). The interest is recalculated at the rate applicable for the period the RD was actually held, minus the penalty. Some banks don’t allow partial withdrawal — you must close the entire RD.
How is RD different from SIP in mutual funds?
Both RD and SIP involve monthly investments, but they differ fundamentally. RDs offer guaranteed, fixed returns with no market risk and are insured up to ₹5 lakh by DICGC. SIPs invest in mutual funds, offering potentially higher but market-linked returns with no guarantee. SIPs benefit from rupee cost averaging in equity markets, while RDs are purely debt instruments.
Is RD interest taxable?
Yes, RD interest is fully taxable under ‘Income from Other Sources.’ Banks deduct TDS at 10% if total interest from all deposits exceeds ₹40,000 in a year (₹50,000 for senior citizens). Unlike FDs, there is no tax-saving RD option under Section 80C. You must report the full interest earned in your income tax return.
Related Resources
Calculators
- FD Calculator — Calculate FD maturity amount with yearly, half-yearly, quarterly, or monthly compounding.
- SIP — Calculate SIP returns with expense ratio impact. See how your monthly investment grows with compounding.
Comparisons
- SIP vs RD — Compare SIP in mutual funds vs recurring deposit across returns, risk, tax efficiency, and withdrawal flexibility.
Disclaimer
This calculator is for educational purposes only and does not constitute financial advice. Actual interest rates and terms vary by institution. Consult your bank or financial advisor for specific deposit terms.