RD Calculator
A recurring deposit puts a fixed amount into the bank every month at a guaranteed rate. See what it matures to, how much of that is interest, and what is left after tax.
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How to use this calculator
- Enter monthly deposit
- Enter interest rate
- Enter tenure
- Enter your income tax rate — RD interest is taxed at your slab rate. Leave at 0 to ignore tax. (optional — leave it as it is if it does not apply)
- Read the result — it updates as you type.
The formula used
M = Σ P × (1 + r/4)(months remaining ÷ 3)
- P
- Monthly deposit
- r
- Annual rate as a decimal
- months remaining
- How long each individual deposit stays invested
An RD is not one deposit — it is many. Your first instalment earns interest for the whole term, the last one for barely a month. The formula adds up each instalment compounded for its own period, with quarterly compounding, which is the method Indian banks use.
Small differences from your bank's figure are normal, because banks round each quarter's interest.
Worked example
₹5,000 a month for 5 years at 7%.
- Total deposited₹5,000 × 60 = ₹3,00,000
- Quarterly rate7 ÷ 4 = 1.75%
- First deposit compounds for 60 months = 20 quarters
- Last deposit compounds for 1 month = ⅓ of a quarter
- Adding all 60 deposits gives roughly ₹3,58,000
You deposit ₹3,00,000 and receive about ₹3.58 lakh — around ₹58,000 of interest.
RD or SIP or FD?
All three are ways of putting money aside. The difference is certainty versus growth.
RD versus FD
An FD invests one amount for the full term; an RD builds up gradually. For the same total money, an FD earns more, simply because the money is invested for longer. An RD wins when you do not have the lump sum yet.
RD versus SIP
An RD's rate is guaranteed; a SIP's is not. Over long periods equity SIPs have historically produced considerably more, with real ups and downs along the way. A common approach is an RD or FD for goals within two or three years, and a SIP for anything longer.
The tax point
RD interest is fully taxable at your slab rate and banks deduct TDS above a threshold. At a 7% rate in the 30% bracket you keep about 4.9% — enter your tax rate above to see it.
Tips and common mistakes
Getting more out of it
- If you already have the full amount, compare against a fixed deposit — the same money earns more when invested at once.
- Enter your tax rate to see what you really keep; RD interest is taxed at your slab rate.
Mistakes to avoid
- Expecting the same return as an FD of the same total. Most of the money is invested for only part of the term.
- Missing instalments, which usually attracts a penalty and can close the account.
- Assuming RD interest is tax-free below a threshold — TDS may not apply, but the tax does.
Frequently asked questions
How is RD interest calculated?
Quarterly compounding, applied to each monthly instalment for however long it has been in the account. That is why the maturity value is less than a simple "rate × total deposits" estimate.
Can I miss an instalment?
Banks usually charge a small penalty for a missed month and may close the account after several defaults. The calculator assumes every instalment is paid on time.
Is RD interest taxable?
Yes, at your income tax slab rate, with TDS deducted above the annual threshold. Enter your rate above to see the after-tax maturity value.
Can I break an RD early?
Yes, usually with a penalty of around 1% and interest recalculated for the period actually completed.
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