RD Calculator

What is an RD (Recurring Deposit)?

A Recurring Deposit (RD) is a savings scheme offered by banks and post offices where you deposit a fixed amount every month for a fixed tenure, earning a fixed interest rate. At maturity, you receive the total amount you deposited plus interest earned.

RDs are perfect for people who want the discipline of regular savings along with assured returns — without taking market risks.

How Does an RD Work? (Quick Example)

Let’s say you open an RD for ₹5,000/month for 2 years at an interest rate of 7% p.a.:

• You deposit ₹5,000 every month (total 24 deposits = ₹1,20,000).
• Each deposit earns interest for the remaining months in the tenure.
• The first ₹5,000 deposit earns interest for 24 months, the last one earns for just 1 month.

At maturity, you get the total deposits + accumulated interest, calculated using a compounding formula.

RD Interest Calculation (Formula)

Most banks use quarterly compounding for RDs. The formula for maturity value (MV) is:

MV = P × [(1 + r/q)^(q × n) – 1] ÷ (1 – (1 + r/q)^(-q/12))

Where: P = monthly deposit, r = annual interest rate in decimal, q = compounding frequency (quarterly = 4), n = tenure in years.

Example: P = ₹5,000, r = 7% = 0.07, q = 4, n = 2 → plug into the formula to get maturity value.

Key Features of an RD

• Fixed monthly deposit: Choose an amount you can comfortably save each month.
• Fixed interest rate: Locked at the start; unaffected by rate changes later.
• Flexible tenures: Usually from 6 months to 10 years.
• Safe & guaranteed: Backed by bank/post office, eligible for DICGC cover up to ₹5 lakh in banks.
• Compounding benefit: Quarterly compounding helps grow savings faster.

Types of RDs in India

• Regular RD: Fixed deposit every month for a fixed tenure.
• Flexi RD: Deposit amount can vary month to month within a limit.
• Senior Citizen RD: Offers higher interest rates for senior citizens.
• NRE/NRO RD: For NRIs, with special tax and repatriation rules.
• Post Office RD: Government-backed, 5-year fixed tenure, nationwide availability.

RD vs FD – What’s the Difference?

Premature Withdrawal & Penalties

• You can close an RD early, but interest will be recalculated at a lower rate and a penalty may apply.
• Some banks have a minimum lock-in (e.g., 3 months) before premature closure is allowed.
• Missed installments may attract penalties or reduce interest earned.

Taxation on RD Interest

• Interest is taxable as “Income from Other Sources”.
• TDS is deducted if total interest in a year exceeds the threshold as per current tax rules.
• Submit Form 15G/15H if eligible to avoid TDS.

About the FinSarthi RD Calculator (Features & How to Use)

The FinSarthi RD Calculator helps you estimate how much your recurring deposits will grow over your chosen tenure — instantly and accurately.

Key Features

• Quick calculation: Enter monthly deposit, rate, and tenure to see maturity instantly.
• Quarterly compounding: Matches how banks calculate RD interest.
• Break-up view: Shows total deposits vs interest earned.
• Custom tenure: Choose months or years as per your plan.
• Senior citizen toggle: Adjusts for higher interest rates automatically.
• Mobile-friendly design: Use it easily on any device.
• Privacy-first: No data is saved — calculations run in-browser.

How to Use

1. Enter your monthly deposit amount.
2. Enter the annual interest rate offered by your bank or post office.
3. Select the tenure in months or years.
4. (Optional) Toggle Senior Citizen for higher rate benefits.
5. Click “Calculate” to view maturity value, total deposit, and interest earned.

RD Maturity Example

• Monthly deposit: ₹5,000
• Tenure: 3 years (36 months)
• Rate: 7% p.a., quarterly compounding
• Total deposits: ₹1,80,000
• Maturity amount ≈ ₹1,96,500 (₹16,500 interest)

Benefits of an RD (with Examples)

• Discipline: Encourages regular savings — e.g., set aside ₹3,000/month for your vacation fund.
• Safe returns: Guaranteed by banks/post office — e.g., use RD to build an emergency fund.
• Goal-based saving: Perfect for short-term goals like school fees, gadgets, or travel.
• Flexible tenures: Choose duration that matches your goal date.

FAQs on RD

1) Is RD better than FD?

RD is better for regular savers; FD is better if you have a lump sum. FD usually gives higher total interest for the same tenure.

2) Can I change my monthly RD amount?

In regular RDs, the monthly amount is fixed. For flexibility, choose a Flexi RD if available.

3) What happens if I miss an installment?

The bank may deduct a penalty and reduce interest earned. Frequent defaults can lead to RD closure.

4) Is RD interest taxable?

Yes, interest is taxable as per your slab. TDS applies above certain limits.

5) Can I close RD before maturity?

Yes, but you’ll earn lower interest and may pay a penalty.

6) Do senior citizens get higher RD rates?

Yes, most banks offer 0.25%–0.75% higher rates to seniors.

7) Is Post Office RD safe?

Yes, it’s government-backed and very safe. However, the rate is revised quarterly.

8) What is the minimum tenure for RD?

Generally 6 months in banks; post office RD is fixed at 5 years.

9) How does compounding affect RD returns?

Quarterly compounding increases maturity amount compared to simple interest.

10) Can I take a loan against RD?

Yes, many banks allow loans up to 80–90% of RD value at an interest rate slightly above RD rate.

11) Is RD available for NRIs?

Yes, via NRE/NRO RDs, with specific rules for taxation and repatriation.

12) What is the maximum tenure for RD?

Usually up to 10 years in banks; post office RD is fixed at 5 years.

Final Thoughts – Plan Your RD with FinSarthi

RDs are a disciplined, safe way to build savings for short-to-medium-term goals. Use the FinSarthi RD Calculator to see exactly how your monthly deposits will grow, plan the right amount and tenure, and stay on track for your goals.