What is a Recurring Deposit (RD)?
A Recurring Deposit is a bank savings product where you deposit a fixed amount every month for a chosen tenure and earn a fixed rate of interest. At the end of the tenure, you receive the total deposited amount along with the accumulated interest. RDs combine the discipline of regular saving with the safety of a bank deposit.
The maturity value is calculated by simulating each month's deposit and applying monthly compounding. Since each instalment earns interest for a different number of months, the total interest is the sum of compound interest on each individual deposit over its remaining tenure. Our calculator applies monthly compounding on the running balance to arrive at an accurate maturity figure.
RDs are suitable for individuals with a steady monthly income who want a guaranteed, risk-free savings plan. Interest earned is taxable, and TDS may apply if the interest exceeds ₹40,000 per year (₹50,000 for senior citizens) across all deposits in the same bank.
Frequently Asked Questions
How is RD maturity calculated?
RD maturity is calculated by simulating each monthly deposit separately. Each instalment earns compound interest from the month it is deposited until maturity. Since each instalment has a different number of months to grow, the maturity value is the sum of future values of all individual instalments using monthly compounding.
What is the typical RD interest rate?
Most banks offer RD interest rates similar to their FD rates for the same tenure. For general citizens, rates typically range from 6.5–7.5% per annum. Senior citizens usually get an additional 0.25–0.5%. Small finance banks may offer higher rates of 7.5–9%.
What happens if I miss an RD instalment?
Missing an instalment attracts a penalty that varies by bank (typically ₹1–2 per ₹100 per month of default). Consecutive missed payments can lead to account deactivation. Premature closure is allowed with a penalty similar to FD premature withdrawal rules.
Is RD interest taxable?
Yes. Interest earned on RDs is taxable as 'Income from Other Sources' at your applicable slab rate. TDS at 10% is deducted if your total interest (across all deposits in one bank) exceeds ₹40,000 per year (₹50,000 for senior citizens). Submit Form 15G/15H if applicable.
What is the difference between RD and SIP?
Both RD and SIP involve regular monthly investments. RD is a bank product offering guaranteed, fixed returns with capital protection — ideal for risk-averse investors. SIP invests in market-linked mutual funds, offering higher long-term return potential but with market risk. For short-term goals (1–3 years), RD is safer; for long-term wealth creation (5+ years), SIP typically outperforms.
Related Calculators
This calculator is for educational purposes only. Actual RD returns depend on the bank's prevailing rate at the time of account opening. Tax implications are not included in this calculation.
Why this calculator is useful
Find Recurring Deposit maturity amount for monthly instalments at any bank interest rate. Enter your monthly deposit, rate, and tenure to see your projected returns. This page is designed to help readers understand the financial scenario clearly, compare the numbers, and make better decisions with practical context.
Why this matters
RD Calculator turns a common financial or planning question into a clear number you can compare, discuss, and act on.
What to review
Use realistic inputs and update assumptions if your situation changes, because even small changes can shift the outcome noticeably.
How to use the result
Treat the calculation as a practical planning guide and verify it with your records or a professional for important decisions.
Quick examples and best practices
- Use realistic inputs: Enter values that match your real income, loan terms, or investment profile so the result feels practical.
- Compare scenarios: Change one variable at a time to see how the result shifts before making a decision.
- Verify major choices: For high-stakes decisions, cross-check the output with documents, spreadsheets, or a qualified professional.
Common questions
How is RD maturity calculated?
RD maturity is calculated by simulating each monthly deposit separately. Each instalment earns compound interest from the month it is deposited until maturity. Since each instalment has a different number of months to grow, the maturity value is the sum of future values of all individual instalments using monthly compounding.
What is the typical RD interest rate?
Most banks offer RD interest rates similar to their FD rates for the same tenure. For general citizens, rates typically range from 6.5–7.5% per annum. Senior citizens usually get an additional 0.25–0.5%. Small finance banks may offer higher rates of 7.5–9%.
What happens if I miss an RD instalment?
Missing an instalment attracts a penalty that varies by bank (typically ₹1–2 per ₹100 per month of default). Consecutive missed payments can lead to account deactivation. Premature closure is allowed with a penalty similar to FD premature withdrawal rules.
Is RD interest taxable?
Yes. Interest earned on RDs is taxable as 'Income from Other Sources' at your applicable slab rate. TDS at 10% is deducted if your total interest (across all deposits in one bank) exceeds ₹40,000 per year (₹50,000 for senior citizens). Submit Form 15G/15H if applicable.
What is the difference between RD and SIP?
Both RD and SIP involve regular monthly investments. RD is a bank product offering guaranteed, fixed returns with capital protection — ideal for risk-averse investors. SIP invests in market-linked mutual funds, offering higher long-term return potential but with market risk. For short-term goals (1–3 years), RD is safer; for long-term wealth creation (5+ years), SIP typically outperforms.