About the RD Calculator
A recurring deposit (RD) lets you save a fixed amount every month with a bank or post office and earn FD-like interest on it. It is a simple, disciplined way to build savings for a goal such as a holiday, a gadget or a child’s school fees.
This RD calculator estimates the maturity value, total deposits and interest earned, using quarterly compounding as most Indian banks and the post office do. The chart shows your deposits and interest building up month after month.
How to use it
- Enter the amount you will deposit every month.
- Enter the interest rate offered by the bank or post office.
- Enter the tenure in years.
- Read the maturity value, total deposited and interest earned.
Formula
Each monthly instalment R earns quarterly compound interest for the time left until maturity: Value of one instalment = R × (1 + r ÷ 400)^(months left ÷ 3), where r is the yearly rate in percent. The maturity value is the sum for all instalments.
Example
Saving ₹5,000 a month for 5 years at 7%: you deposit ₹3,00,000 and the maturity value is about ₹3,59,664, so the interest earned is about ₹59,664.
RD or SIP?
An RD gives a fixed, known return and your capital is safe, which makes it good for short-term goals. A SIP in an equity mutual fund can earn more over long periods but the value goes up and down. Many people use an RD for goals within two or three years and SIPs for goals further away.
Missing an instalment
Banks and the post office usually charge a small penalty for a late or missed instalment, and several missed instalments can lead to the account being closed early. Setting up an automatic transfer on salary day avoids this.
Frequently asked questions
Is RD interest taxable?
Yes. It is added to your income and taxed at your slab rate, and TDS may apply above the yearly limit.
Can I change the monthly amount later?
No. The instalment is fixed when you open the RD. You can open another RD for extra savings.
Why is my bank’s maturity value different?
Some banks use slightly different day counts or rounding. The result is a close estimate.
What is the minimum RD amount?
It depends on the bank. Many allow RDs from ₹100 a month.