RD Calculator
Calculate recurring deposit maturity value and interest. Enter your monthly instalment, interest rate and tenure to see your RD returns instantly.
Formula last reviewed 15 September 2026 · How we verify our calculators
Maturity value
- Total deposited
- ₹3,00,000
- Interest earned
- ₹59,664
Updates live as you type
Frequently asked questions
A recurring deposit is a bank product in which you commit to paying a fixed amount every month for a fixed term, at an interest rate locked when you open the account. It is the fixed deposit's counterpart for people who save from monthly income rather than from an existing lump sum. Like an FD it carries DICGC insurance up to 5,00,000 per depositor per bank, and its return is contractually guaranteed rather than market-linked.
Each instalment earns interest only for the time it is actually on deposit, so the maturity is the sum of every instalment compounded separately. Indian banks compound RD interest quarterly, so each instalment grows at (1 + i)^q where i is the annual rate divided by four and q is the number of quarters that instalment remains. On a five-year RD the first instalment compounds for 20 quarters and the last for about a third of one, which is why the amounts differ so much.
Because the money arrives gradually. In a 5,000-a-month RD over five years, the average rupee is on deposit for only about two and a half years, not five, even though the account runs the full term. So 3,00,000 deposited across sixty months earns 59,664 at 7%, while 3,00,000 deposited as a single FD on day one at the same rate earns considerably more. Comparing RD and FD on headline rates is meaningless — compare maturity values for the same total money and timing.
Yes, fully at your income tax slab rate, exactly like fixed deposit interest. TDS is deducted at 10% once interest across your deposits at one bank exceeds 50,000 in a financial year, or 1,00,000 for senior citizens. TDS is not the final liability: a taxpayer in the 30% slab owes the remaining 20% at filing. Interest is also taxable as it accrues each year, not only in the year the deposit matures.
Match the tool to the horizon rather than to how the word guaranteed feels. Under about three years, an RD is genuinely the better choice: equity over such a short window can easily be below what you contributed exactly when you need the money, and an RD cannot fall. Beyond seven or eight years the comparison reverses sharply, because a guaranteed 7% taxed at slab rates trails inflation while equity has historically not. Many people sensibly run both for different goals.
Banks charge a penalty per missed instalment, typically a small amount per 100 of the instalment value, and it is deducted from the maturity proceeds. Missing several consecutive instalments can cause the bank to close the account prematurely and pay out at a reduced rate. The practical lesson is to size the instalment for a difficult month rather than a comfortable one — a smaller RD you never miss beats a larger one you default on.
Yes, but at a cost. Premature closure typically attracts a penalty of 0.5% to 1%, and the bank pays interest at the rate that applied to the period the deposit actually ran rather than the rate you contracted for. On a five-year RD closed after eighteen months, that means earning roughly the eighteen-month rate minus the penalty, which can be substantially below expectations. Most banks also do not permit partial withdrawal — it is all or nothing.
No. The rate is fixed at the moment you open the account and applies to every instalment for the full tenure, regardless of what the RBI or the bank does afterwards. This protects you if rates fall and locks you out if they rise. If you expect rates to rise materially, a shorter tenure that you renew preserves flexibility; if you expect them to fall, locking a longer tenure at today's rate is the better position.
The structure is the same but some terms differ. The post office National Savings Recurring Deposit runs a fixed five-year term at a rate notified quarterly by the government, and it carries a sovereign guarantee rather than DICGC insurance. Bank RDs offer flexible tenures, usually from six months to ten years, at rates each bank sets. Interest is taxable at slab rates in both cases — the post office variant is not tax-free, which is a common misconception.
A deposit that grows every month, at a rate that never moves
Put ₹5,000 a month into a recurring deposit at 7% for five years and you will have paid in ₹3,00,000 and receive ₹3,59,664 — ₹59,664 of interest on money you never had to find in one lump.
A recurring deposit is the fixed deposit's sibling for people who save from income rather than from savings. You commit to a fixed monthly instalment for a fixed term, and the bank locks the interest rate at the moment you open the account. Every instalment thereafter earns that same rate, no matter what happens to rates over the following years. Like an FD, an RD is covered by DICGC insurance up to ₹5 lakh per depositor per bank, and like an FD its return is entirely known in advance.
The distinction from a SIP is worth being precise about, because the two are constantly confused. Both take a fixed amount monthly. An RD's return is contractually guaranteed and its value never falls; a SIP buys market-linked mutual fund units whose value fluctuates and whose return is an assumption, not a promise. An RD cannot lose money and will rarely beat inflation after tax. A SIP can do both. They are not competitors so much as tools for different horizons.
Why the maturity is not simply "rate × total deposits"
Each instalment earns interest only for the time it has actually been in the account. Your first ₹5,000 sits for sixty months; your final one earns essentially nothing. The maturity is therefore the sum of sixty separately compounded deposits — not the total deposited grown at 7%.
Indian banks compound RD interest quarterly, following the convention the State Bank of India set. For each instalment:
Value at maturity = Instalment × (1 + i)^q
- i — the quarterly rate: the annual rate ÷ 4 ÷ 100, so 7% gives 0.0175.
- q — the number of quarters that instalment remains on deposit, which falls by one-third of a month for each successive instalment.
The maturity value is the sum of that expression across every instalment.
The practical consequence is that an RD's effective yield is always well below its headline rate. Here, ₹59,664 of interest on ₹3,00,000 deposited looks like 19.9% over five years, but the average rupee was only on deposit for about two and a half years, not five. This is not a trick — it is arithmetic — but it explains why an RD at 7% produces visibly less than an FD at 7% for the same total money, and why comparing the two on their headline rates is meaningless.
Sixty instalments, traced
At ₹5,000 a month, 7% annual, five years — i = 0.0175 per quarter.
Instalment 1 is deposited in month 1 and stays 60 months, which is 20 quarters. It matures at 5,000 × (1.0175)²⁰ = 5,000 × 1.41478 = ₹7,074.
Instalment 12, deposited at the end of year one, stays 49 months ≈ 16.33 quarters: 5,000 × (1.0175)^16.33 = ₹6,645.
Instalment 30, the midpoint, stays 31 months ≈ 10.33 quarters: 5,000 × (1.0175)^10.33 = ₹5,984.
Instalment 60, the last, stays a single month ≈ 0.33 quarters: 5,000 × (1.0175)^0.33 = ₹5,029.
Sum all sixty and the account matures at ₹3,59,664.
The spread from ₹7,074 down to ₹5,029 is the whole story of a recurring deposit. Early instalments do most of the earning, which is the argument for starting an RD as early in the year as possible and for choosing the longest tenure you can sustain.
What tenure does. The same ₹5,000 for one year yields only ₹2,311 of interest on ₹60,000 — because no rupee has been on deposit long enough to matter. Interest as a proportion of deposits rises steeply with term.
When an RD is the right choice
Building a lump sum from monthly income. Saving for an insurance premium, a school fee, a trip or an EMI down payment twelve to thirty-six months out.
Creating an emergency fund from scratch, when you have no capital to deposit but can commit ₹2,000 a month.
Any goal inside three years. This is where an RD genuinely beats a SIP. Equity over such a short window can easily be below what you contributed exactly when you need it; an RD cannot.
Savers who want the commitment. The standing instruction and the penalty for missing it are, for some people, the point.
It is the wrong tool for long-horizon wealth building. Over ten or fifteen years, a guaranteed 7% taxed at slab rates will trail inflation, and the certainty you paid for costs more than it is worth at that distance.
Reading your result
The interest earned is pre-tax and taxed at your slab rate, exactly like FD interest. TDS applies at 10% once interest across your deposits at one bank exceeds ₹50,000 in a year (₹1,00,000 for senior citizens), and TDS is not the final liability — a 30%-slab taxpayer owes the remaining 20% at filing. Interest is also taxable as it accrues each year, not in the year the RD matures.
Post-tax, the ₹59,664 above becomes roughly ₹41,700 at a 30% slab. Against ₹3,00,000 deposited over five years, that is a real return close to zero once inflation is counted. This is the honest position: an RD reliably preserves and slightly grows nominal money, and it is not a wealth-building instrument.
Compare the maturity against what the same instalment would produce in a SIP only with the horizon in mind. Under three years, the RD's certainty is worth more than the SIP's expected return. Beyond seven or eight, the comparison reverses sharply.
What trips people up
Comparing RD and FD rates directly. A 7% RD earns much less than a 7% FD on the same total, because RD money arrives gradually. Compare maturity values, never headline rates.
Missing instalments. Banks levy a penalty per missed instalment and may close an account after several consecutive misses, paying out at a reduced rate. Size the instalment for a bad month, not a good one.
Expecting the interest to be tax-free. It is fully taxable. Only the post office's five-year RD interacts differently with certain provisions, and even there the interest is taxable.
Breaking it early. Premature closure attracts a penalty of roughly 0.5–1% and pays interest at the rate applicable to the period actually completed, which on a partly-run long-tenure RD can be substantially lower than contracted.
Assuming the rate can improve. It is fixed at opening for the whole term. If rates rise sharply, you are locked out — the mirror image of the protection you bought.
Opening one when a SIP fits better. For a goal ten years away, choosing an RD for its safety is choosing a near-certain real loss over a probable real gain. Match the instrument to the horizon rather than to how the word "guaranteed" feels.
Overlooking the sweep or auto-sweep alternative. Several banks offer a sweep-in facility that automatically converts balances above a threshold in your savings account into short fixed deposits, and reverses it when you need the money. For savers whose surplus is irregular rather than a reliable fixed monthly figure, that often produces a comparable return with none of an RD's penalty risk. It is not better than an RD — it lacks the enforced discipline that is half the point — but it is worth knowing about before committing to a five-year instalment you may struggle to sustain.