RD Calculator

What Is a Recurring Deposit?

A recurring deposit (RD) is a bank or post office deposit where you pay a fixed amount every month for a chosen tenure and receive the installments plus interest at maturity. The rate is fixed when you open the account, so like a fixed deposit the outcome is known in advance, but you build the balance gradually from your monthly income instead of investing a lump sum.

Bank RDs in India are covered by DICGC deposit insurance up to ₹5 lakh per depositor per bank, together with your other deposits there. India Post offers a five-year RD with a rate set by the government each quarter.

How to Use the RD Calculator

Enter the monthly installment, the annual interest rate offered for your tenure and the tenure in months. The calculator shows the maturity value, total deposits and interest earned, along with a year-by-year schedule. Because the math matches what banks publish, it works as an SBI RD calculator or an HDFC RD calculator: just enter that bank's current rate.

Results can differ from a bank's quote by a few rupees, because banks round interest at each quarter and some count the exact days between installments.

RD Interest Formula

Banks compound RD interest quarterly. The first installment stays for the full tenure, the second for one month less, and so on; each one grows at (1 + r/400) per quarter for the fraction of quarters it is held. Adding them up gives the closed formula above.

With the defaults of ₹5,000 a month at 7% for 60 months: i = 0.0175 and n = 20 quarters. 1.0175²⁰ − 1 = 0.41478 and 1 − 1.0175^(−1/3) = 0.005766, so M = 5,000 × 0.41478 ÷ 0.005766 ≈ ₹3,59,664. You deposit ₹3,00,000 and earn about ₹59,664 in RD interest.

M = R × [(1 + i)ⁿ − 1] ÷ [1 − (1 + i)^(−1/3)]

M

maturity value

R

monthly installment

i

quarterly rate: annual rate ÷ 400

n

number of quarters: tenure in months ÷ 3

This is the sum of every installment compounded quarterly for the time it stays in the account: R × (1 + i)^(k/3) for an installment held k months.

RD vs. FD vs. SIP

An RD earns less than an FD of the same total at the same rate, because your money arrives over time: most installments are in the account for only part of the tenure. Its strength is discipline, turning monthly savings into a guaranteed sum. A SIP in an equity mutual fund works the same way on the deposit side but carries market risk in exchange for the possibility of higher returns.

Practical Tips

• Pay on time. Banks charge a penalty for missed installments, and several missed payments can lead to the account being closed.
• Set up auto-debit on the day after your salary arrives.
• RD interest is taxable at your slab rate and is subject to TDS like FD interest.
• Senior citizens usually get a higher rate; check the bank's senior rate card.
• Match the tenure to the goal, such as a 12-month RD for an annual insurance premium or school fees.

Frequently asked questions

Sources

• Reserve Bank of India
• DICGC – Deposit Insurance and Credit Guarantee Corporation
• India Post – Post Office Savings Schemes