Recurring Deposit (RD) Calculator
Calculate the guaranteed maturity value of your monthly bank Recurring Deposit, using the standard quarterly-compounding formula.
RD Details
Maturity Summary
Maturity Value
₹1,28,425
Total Deposited
₹1,20,000
Interest Earned
₹8,425
Current Recurring Deposit & Reference Rates (India)
As of September 2026Sources: Reserve Bank of India (rbi.org.in) monetary policy statements, National Savings Institute (PPF notification), and public rate cards from major Indian banks.
Every formula on this page is built to standard Indian banking and regulatory conventions (RBI guidelines, IBA formulas, current FY tax rules) and independently verified with worked numeric examples before publishing.
What is this Calculator?
The Recurring Deposit (RD) Calculator estimates the guaranteed maturity value of a bank Recurring Deposit — one of the most popular low-risk savings instruments in India, where you commit to depositing a fixed amount every month for a chosen tenure in exchange for a fixed, bank-guaranteed interest rate.
It's useful for anyone building a disciplined monthly savings habit toward a specific short-to-medium-term goal, such as a wedding, a vacation, an appliance purchase, or an emergency fund, without taking on any market risk.
How it Works
Unlike a Fixed Deposit, where you invest a lump sum once, an RD accepts a fresh monthly deposit, each of which starts earning interest from the day it's deposited. Indian banks compound RD interest quarterly using the standard formula:
Maturity Value = R × [((1 + i)^n − 1) / (1 − (1 + i)^(−1/3))]
- R is your fixed monthly deposit
- i is the quarterly interest rate (annual rate ÷ 400)
- n is the number of quarters in your tenure (months ÷ 3)
This is the standard formula used by Indian banks and the Indian Banks' Association (IBA) to compute RD payouts, and it's what this calculator uses.
Example Calculation
Ritu starts a Recurring Deposit with a ₹5,000 monthly deposit at 6.5% annual interest (compounded quarterly) for 24 months.
- Total Deposited = ₹5,000 × 24 = ₹1,20,000
- Maturity Value ≈ ₹1,28,425
- Interest Earned ≈ ₹8,425
Because the interest rate is fixed and guaranteed by the bank for the entire tenure, Ritu knows this exact maturity figure from day one — a key advantage of RDs over market-linked instruments like SIPs.
Benefits of Using This Tool
- Guaranteed, Predictable Returns: Unlike mutual fund SIPs, an RD's interest rate is locked in at account opening, so you know your exact maturity amount in advance.
- Builds Savings Discipline: Committing to a fixed monthly deposit is one of the simplest ways to build a consistent saving habit for short-term goals.
- Goal-Based Planning: Use this calculator to work backward — decide your target amount and tenure, then find the monthly deposit needed to get there.
Practical Tips:
- Missing a monthly deposit usually attracts a small penalty and, in some cases, can affect your final maturity amount — set up an auto-debit standing instruction to avoid missed payments.
- RD interest is fully taxable at your income tax slab rate, and banks deduct TDS if the interest earned crosses the prescribed threshold in a financial year — factor this into your net returns.
- If you need flexibility to vary your deposit amount, ask your bank about Flexi-RD options, or consider a mutual fund SIP instead, which trades the RD's guarantee for potentially higher (but market-linked) returns.
Frequently Asked Questions (FAQs)
Can I withdraw my RD before maturity?
Most banks allow premature withdrawal of an RD, but you'll typically forfeit a portion of the interest (a penalty, often 0.5-1% below the applicable rate) and, in some cases, lose the tenure-based bonus rate. Check your specific bank's premature withdrawal policy before opening the account.
What happens if I miss a monthly RD installment?
Banks usually charge a small penalty (a fixed amount or a percentage of the missed installment) for each missed deposit. Missing multiple consecutive installments can, in some cases, lead the bank to close the account early. Setting up an automatic debit from your savings account is the easiest way to avoid this.
Is RD interest taxable in India?
Yes. Interest earned on a Recurring Deposit is fully taxable as 'Income from Other Sources' at your applicable income tax slab rate. Banks deduct TDS at 10% if your total interest income from that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), though you remain liable to pay tax on the full amount as per your slab.
RD vs SIP — which is better?
It depends on your risk appetite and time horizon. An RD offers a guaranteed, fixed return with zero market risk, making it ideal for short-term, capital-protection goals. A mutual fund SIP carries market risk but has historically delivered higher returns over longer horizons (5+ years), making it more suitable for long-term wealth building where you can ride out short-term volatility.
Sources & References
- Indian Banks' Association (IBA) — Standard Recurring Deposit maturity value formula