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Smart Finance Suite

RD Calculator — Calculations & Slabs for FY 2026-27

Enter your monthly RD instalment, interest rate, and tenure to compute the maturity amount using the standard Indian quarterly-compounding formula for recurring deposits.

1. Investment Variables

RD vs SIP

A Recurring Deposit (RD) provides guaranteed, risk-free returns backed by bank security, whereas mutual fund SIPs are market-linked. RDs compound quarterly, while SIPs are calculated using CAGR.

Common Questions & Calculator Insights

How is Recurring Deposit (RD) interest calculated in India?

RD interest is calculated using a quarterly compounding frequency. Interest is computed monthly on the running balance of your account. However, this interest compounds (is added back to the principal balance) only once every three months.

Can I skip or delay a monthly RD deposit without penalty?

If you delay or miss your monthly RD installment, most banks charge a small penalty fee (e.g. ₹1.50 per ₹100 per month). If you miss deposits continuously for 4–6 months, the bank may close your RD account and refund the balance at applicable rates.

Is RD interest taxable under Indian Income Tax rules?

Yes, interest earned on Recurring Deposits is fully taxable as "Income from Other Sources". Banks deduct 10% TDS if your total interest earned across FDs and RDs at that bank exceeds ₹50,000 in a year (₹1,00,000 for senior citizens).

What happens if I close my Recurring Deposit account prematurely?

If you close your RD account before maturity, the bank pays interest at the rate applicable for the period the deposit actually remained active, minus a premature withdrawal penalty (usually 0.5% to 1%).

Where can I verify the source data for this calculator?

You can verify the values against the official notifications listed in our data sources section at the bottom of the page.

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About This Calculator

Target Audience: Salaried taxpayers, investors & retirees planning Indian tax & wealth growth

💡 What Does This Calculator Do?

This tool calculates the final maturity amount you will get when you save a fixed amount of money every month in a bank. It is perfect for people who want a safe, risk-free savings plan but do not have a large lump sum to deposit all at once. It helps you build a disciplined savings habit step by step.

📋 How to Use It

  1. 1
    Monthly Deposit: Type the exact amount of money you want to save in the bank every month.
  2. 2
    Annual Interest Rate: Type the yearly interest percentage your bank offers for recurring deposits.
  3. 3
    Time Period: Type the number of years you want to keep saving, usually from 1 to 10 years.

🧬 The Logic Explained Simply

  • The Concept: Imagine making a new small deposit into a locked piggy bank every month. Each monthly payment earns interest for the remaining months of the term. The bank calculates the interest on your total growing balance and adds it to your account every three months. Your savings compound quarterly to give you a guaranteed payout.
  • The Formula:

M = P × [((1 + i)^n - 1) / (1 - (1 + i)^(-1/3))]

Where M is maturity, P is monthly deposit, i is interest rate divided by 4, and n is number of quarters.

💡 Real-World Calculation Breakdown

For example, if you save ₹5,000 every month in a recurring deposit for 5 years at an annual interest rate of 6.8%. Over 5 years, you will make 60 monthly deposits, investing a total of ₹3,00,000. Due to quarterly compounding interest, you earn ₹57,808 in interest, giving you a final guaranteed maturity amount of ₹3,57,808.

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