RD Calculator

What is a recurring deposit?

A recurring deposit (RD) is a savings scheme where you deposit a fixed amount every month for a fixed period. At the end of the tenure, you receive your total deposits plus interest. RDs are offered by all banks and post offices.

RD is a good option for people with a regular monthly income who want guaranteed returns and want to build a saving habit. The interest rate is fixed for the full tenure.

RD maturity formula

Banks compound RD interest every quarter. Each monthly installment earns interest for the remaining period. The calculator applies this formula to every installment and adds them up:

M = Σ  P × (1 + r/4)^(4 × n/12)

• M = Maturity amount
• P = Monthly deposit
• r = Yearly interest rate (decimal)
• n = Number of months remaining for each installment

Example: ₹50,000 per month for 3 years at 6.5% gives a total investment of ₹18,00,000, interest of ₹1,91,214 and a maturity value of ₹19,91,214. You can enter the time period in years or in months (3, 6, 9 or 12).

Features of a recurring deposit

• Tenure from 6 months to 10 years.
• Minimum monthly deposit is usually ₹100 (₹10 at post office).
• Interest rate similar to bank FDs; senior citizens get extra interest.
• Loan or overdraft facility against RD balance.
• Penalty for missed installments and premature closure.

RD vs SIP

RD gives fixed and guaranteed returns, which are fully taxable. SIP in mutual funds gives market linked returns that can be higher over the long term and are more tax efficient. Use RD for short term goals within 1 to 3 years and SIP for long term goals.