RD Calculator
| Quarter | Opening (₹) | Deposited (₹) | Interest (₹) | Closing (₹) |
What This Tool Does
This calculator estimates how much your recurring deposit will be worth at maturity. Enter your fixed monthly deposit amount, the applicable interest rate, and your tenure, and it returns the total amount invested, interest earned, and final maturity value. It handles the quarterly compounding that most banks apply to RDs automatically, saving you the effort of running the calculation manually for each monthly installment.
You can also use this Step-Up SIP Calculator.
How It's Calculated
RD interest is compounded quarterly in India, which makes manual calculation more complex than it appears. Each monthly installment earns interest for a different remaining period — the first installment compounds for the full tenure, the second for one month less, and so on down to the final installment.
The standard formula for each installment is:
A = P × (1 + R/N)^(N×t)
Where:
- A = maturity value of that installment
- P = monthly deposit amount
- R = annual interest rate (as a decimal)
- N = compounding frequency (4 for quarterly)
- t = remaining tenure for that installment in years
The total maturity amount is the sum of the maturity values of all individual installments.
Worked Example:
Monthly deposit: ₹5,000
Tenure: 1 year (12 installments)
Interest rate: 8% per annum, compounded quarterly
Each installment is calculated separately:
- Installment 1 (compounds for 12 months): ₹5,000 × (1 + 0.08/4)^(4×12/12) = ₹5,415
- Installment 2 (compounds for 11 months): ₹5,000 × (1 + 0.08/4)^(4×11/12) = ₹5,379
- ...continuing down to...
- Installment 12 (compounds for 1 month): ₹5,000 × (1 + 0.08/4)^(4×1/12) = ₹5,033
Sum of all 12 installments = approximately ₹62,730
Total deposited: ₹60,000 | Interest earned: ₹2,730
Doing this for 36 or 60 installments manually is impractical — the calculator handles it instantly.
Edge Cases and Special Rules
Quarterly compounding is standard: Most banks including SBI, HDFC, ICICI, Axis, and Kotak compound RD interest quarterly. Post Office RDs also use quarterly compounding. This means the effective annual yield is slightly higher than the stated rate — at 7% compounded quarterly, the effective rate is approximately 7.19%.
TDS on RD interest: Unlike FDs where TDS kicks in if annual interest exceeds ₹40,000, RDs are also subject to TDS — though implementation varies across banks. The calculator shows gross interest. If your total interest income across deposits exceeds the threshold, TDS will be deducted. Submit Form 15G or 15H if your income falls below the taxable limit.
Premature withdrawal: Breaking an RD before maturity typically results in a penalty — usually a lower interest rate applied for the period held, similar to FD premature withdrawal rules. The specific penalty varies by bank and tenure completed.
Missed installments: Most banks charge a penalty for missing a monthly deposit — typically around ₹1–2 per ₹100 per month of delay. If installments are missed repeatedly, the bank may close the account prematurely.
Post Office RD: Post Office RDs run for a fixed 5-year tenure. The interest rate is set by the government quarterly. A unique feature of Post Office RDs is the loan facility — after 12 installments, you can borrow up to 50% of the balance without breaking the deposit.
Senior citizen rates: Unlike FDs, most banks do not offer additional interest rates for senior citizens on RDs. Verify with your specific bank before opening an account.
RD vs. FD vs. SIP
RD vs. FD: Both are fixed-income instruments with similar interest rates. The key difference is the investment pattern — RD accepts monthly installments, making it suitable for salaried individuals building savings from regular income. FD requires a one-time lump sum. If you have a large amount available, an FD generally earns more since the full principal compounds from day one.
RD vs. SIP: An RD offers fixed, guaranteed returns with no market risk. A SIP in a mutual fund carries market risk but has historically delivered significantly higher returns over long periods — 10–12% versus 6–7% for most RDs. RD is appropriate for short-term goals and capital preservation; SIP is better suited to long-term wealth creation where some volatility is acceptable.
Who Uses This
- Salaried individuals building a fixed monthly savings habit toward a specific short-term goal
- Students and young earners starting their first savings product with a small monthly amount
- Anyone comparing bank RD rates across SBI, HDFC, ICICI, Axis, Kotak, and Post Office before opening an account
- Parents saving monthly toward a near-term expense — school fees, a family trip, or a down payment
- Investors looking for a low-risk complement to their equity or mutual fund portfolio
FAQ
What is the minimum amount to start an RD?
Most banks allow RDs starting from as low as ₹100 per month, though some set the minimum at ₹500 or ₹1,000. Post Office RDs can be started with as little as ₹100 per month.
What is the typical tenure range for an RD?
RD tenures generally range from 6 months to 10 years depending on the bank. Post Office RDs have a fixed 5-year tenure. Some banks offer RDs in monthly increments within their minimum and maximum tenure limits.
Is TDS applicable on RD interest?
Yes. RD interest is subject to TDS if total interest income from deposits in a financial year exceeds ₹40,000 (₹50,000 for senior citizens). Implementation varies — check with your bank and submit Form 15G or 15H if applicable to avoid deduction.
Can I break my RD before maturity?
Yes, most banks allow premature closure. A penalty is typically applied — the interest paid is reduced by 0.5% to 1% below the applicable rate for the period held. Some banks also require a minimum holding period before premature closure is permitted.
How is Post Office RD interest rate determined?
The Post Office RD rate is set by the Government of India and revised quarterly, in line with other small savings scheme rates. It applies uniformly across all Post Office RD accounts regardless of location or tenure.
A Note on Results
All figures this calculator produces are estimates based on the monthly deposit, rate, and tenure you enter, assuming quarterly compounding and no missed installments. Actual maturity amounts may vary due to TDS deductions, premature withdrawal penalties, or rate revisions during the tenure. Confirm the final amount with your bank or post office before opening an account.