How is recurring deposit interest calculated?

RD interest is calculated on each monthly instalment from the date it is deposited until maturity, and Indian banks compound it quarterly. Because each instalment earns interest for a different length of time — the first for the whole tenure, the last for just one month — the maturity value is the sum of every instalment grown to the maturity date at the quarterly-compounded rate. This is why a proper RD calculator, which models the quarterly compounding, gives a more accurate maturity figure than a flat simple-interest estimate. This tool uses that standard quarterly-compounding method.

What is the difference between an RD and a fixed deposit (FD)?

Both are guaranteed-return bank deposits, but an FD takes a single lump sum upfront and pays interest on it for the full term, while an RD takes a fixed amount every month and pays interest on the growing balance. An FD suits someone who already has a lump sum; an RD suits someone who wants to save gradually from monthly income. For the same total amount and rate, an FD earns slightly more because the entire sum is invested from day one, whereas in an RD the money goes in month by month. Use the FD calculator for lump sums and this RD calculator for monthly saving.

Is RD interest taxable?

Yes. Interest earned on a recurring deposit is fully taxable as income, added to your total income and taxed at your slab rate. Banks also deduct TDS (tax deducted at source) on RD interest if the total interest across your deposits with that bank crosses the annual threshold (₹40,000 for most depositors, ₹50,000 for senior citizens). The maturity value this calculator shows is before any tax — your actual post-tax return will be lower depending on your slab. You can submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.

Can I withdraw an RD before maturity?

Most banks allow premature closure of an RD, but it usually comes with a penalty — typically the interest is recalculated at a lower rate (often 0.5–1% below the contracted rate), reducing your return. Some banks also offer a loan or overdraft against the RD balance, which can be a better option than breaking it if you need funds temporarily. Partial withdrawal is generally not allowed; it is usually all or nothing. Because premature closure costs you interest, it is best to choose a monthly deposit and tenure you can sustain comfortably for the full term.

What happens if I miss a monthly RD instalment?

Missing an instalment typically attracts a small penalty per missed month, and repeated defaults can lead the bank to close the account prematurely. The exact penalty varies by bank but is usually a few rupees per ₹100 of the monthly instalment per month of delay. To avoid this, most people set up a standing instruction so the RD instalment is auto-debited from their savings account each month. If you anticipate trouble maintaining the deposit, choose a smaller monthly amount you can reliably sustain.

Is the information I enter stored anywhere?

No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — monthly deposit, interest rate, or tenure — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. The maturity figure is informational and based on the standard quarterly-compounding RD formula; your bank’s exact figure may differ slightly depending on its compounding convention and the deposit date, so confirm with the bank before relying on it for a precise goal.

Finance

RD Calculator

Calculate the maturity value of a recurring deposit — monthly deposit, interest rate, and tenure, with quarterly compounding the way Indian banks actually pay it. Free, in your browser, nothing uploaded.

By the Samastam teamLast updated 2026-06-24Editorial standards

RD details

Monthly deposit (₹)

₹

Most banks allow RDs from ₹500 a month upward.

Interest rate (% per year)

RD rates track FD rates, usually 6–8%. Compounded quarterly.

Tenure (months)

RDs typically run from 6 months to 10 years.

Breakdown

Maturity value: —
Total deposited: —
Interest earned: —

Enter a monthly deposit and tenure on the left. The maturity value, total deposited, and interest earned update here as you type.

A recurring deposit (RD) is a bank savings instrument where you deposit a fixed amount every month for a chosen tenure and earn a guaranteed rate of interest, compounded quarterly, with the whole sum paid back at maturity. It suits savers who want the discipline of setting aside a fixed amount monthly and the certainty of a fixed return, without the market risk of a SIP. This calculator works out what your RD matures to: enter your monthly deposit, the interest rate your bank offers, and the tenure in months, and it shows the maturity value, the total you will have deposited, and the interest earned. Every figure is computed in your browser using the standard quarterly-compounding RD formula; nothing you enter is sent anywhere.

What this is and why it matters

A recurring deposit answers a specific need: you have a steady monthly surplus and want it to grow at a guaranteed rate without any market risk. Unlike a fixed deposit, which takes a single lump sum upfront, an RD lets you build a corpus gradually — you commit to depositing a fixed amount every month, and the bank pays a fixed rate of interest on the growing balance. At the end of the tenure you receive the total of all your deposits plus the accumulated interest. It is the instrument of choice for salaried savers building towards a near-term goal: a down payment, an annual insurance premium, a planned purchase, or simply an emergency buffer accumulated with discipline.

The mechanics matter because they determine the return. Indian banks compound RD interest quarterly, not monthly or annually. Each monthly instalment you pay starts earning interest from the moment it is deposited and compounds every quarter until maturity. This means your first instalment earns interest for the entire tenure, while your last instalment earns for just one month — so the earlier deposits do the heavy lifting. The maturity value is the sum of each instalment grown to the maturity date, which is why an RD calculator that models the quarterly compounding correctly gives a more accurate figure than a simple interest estimate.

An RD sits between a savings account and a fixed deposit in spirit, and contrasts usefully with a SIP. Against a savings account, it offers a meaningfully higher, locked-in rate in exchange for committing to the monthly deposit. Against a fixed deposit, it suits those who do not have a lump sum today but can save monthly. Against a SIP in a mutual fund, the RD trades away the higher long-run growth potential of equity for a guaranteed return and zero volatility — making it appropriate for goals where you cannot afford the value to fall. Knowing the maturity figure in advance, which this calculator provides, lets you size the monthly deposit to hit a target amount by a target date.

How to use this tool

Enter your monthly deposit. Type the fixed amount you plan to deposit each month. Most banks let you open an RD from as little as ₹500 a month, with no real upper limit. The maturity value updates as you type, with nothing submitted anywhere.

Enter the interest rate. Use the rate your bank quotes for the RD tenure you want — RD rates are similar to fixed-deposit rates and vary by bank and tenure, typically in the 6–8% range, with senior citizens usually offered a small premium. The field is editable so you can compare what different banks offer.

Set the tenure in months. Choose how long you will keep depositing — RDs typically run from 6 months to 10 years. A longer tenure means more instalments and more compounding, so both your total deposits and your interest rise. Use the quick-select buttons for common tenures or type a custom number of months.

Read the maturity breakdown. The result shows three figures: the maturity value you will receive, the total amount you will have deposited over the tenure, and the interest earned on top. The split between deposited and interest shows how much of your maturity is your own money versus the bank’s interest — useful for comparing an RD against an FD or SIP for the same monthly outlay.

Plan towards a target. If you have a target amount and date in mind, adjust the monthly deposit until the maturity value matches your goal. Because the return is guaranteed, the figure the calculator shows is what you will actually receive (before tax), so you can plan around it with confidence — unlike a market-linked SIP, where the final value is only an estimate.

Examples and use cases

A salaried saver building a down payment

A salaried professional wants to accumulate towards a home down payment over five years and can set aside ₹10,000 a month. At a 7% RD rate compounded quarterly over 60 months, the RD matures to roughly ₹7.2 lakh, of which ₹6 lakh is the deposits and about ₹1.2 lakh is interest. Because the return is guaranteed, the saver knows the corpus will be there when the down payment is due — certainty an equity SIP cannot offer for a fixed near-term date.

A short-term goal over one year

Someone saving for an annual insurance premium deposits ₹5,000 a month into a 12-month RD at 7%. The calculator shows a maturity of about ₹62,300 against ₹60,000 deposited — around ₹2,300 of interest. The interest is modest over a single year, but it beats leaving the money in a savings account, and the monthly commitment enforces the discipline of setting the premium money aside rather than spending it.

Comparing tenure lengths

A saver depositing ₹3,000 a month compares a 3-year and a 5-year RD at the same 7% rate. The 3-year RD matures to about ₹1.2 lakh on ₹1.08 lakh deposited; the 5-year RD matures to about ₹2.16 lakh on ₹1.8 lakh deposited. The longer tenure earns disproportionately more interest because the early instalments compound for longer — the calculator makes the trade-off between commitment length and interest visible.

A senior citizen using the rate premium

A retired saver, offered a senior-citizen premium of 0.5% over the standard rate, deposits ₹20,000 a month into a 5-year RD at 7.5% instead of 7%. Over 60 months the higher rate adds several thousand rupees of extra interest versus the standard rate, on the same deposits. Re-running the calculator with each rate shows exactly how much the premium is worth, helping the saver pick the bank with the best senior rate.

Frequently asked questions

How is recurring deposit interest calculated?: RD interest is calculated on each monthly instalment from the date it is deposited until maturity, and Indian banks compound it quarterly. Because each instalment earns interest for a different length of time — the first for the whole tenure, the last for just one month — the maturity value is the sum of every instalment grown to the maturity date at the quarterly-compounded rate. This is why a proper RD calculator, which models the quarterly compounding, gives a more accurate maturity figure than a flat simple-interest estimate. This tool uses that standard quarterly-compounding method.
What is the difference between an RD and a fixed deposit (FD)?: Both are guaranteed-return bank deposits, but an FD takes a single lump sum upfront and pays interest on it for the full term, while an RD takes a fixed amount every month and pays interest on the growing balance. An FD suits someone who already has a lump sum; an RD suits someone who wants to save gradually from monthly income. For the same total amount and rate, an FD earns slightly more because the entire sum is invested from day one, whereas in an RD the money goes in month by month. Use the FD calculator for lump sums and this RD calculator for monthly saving.
Is RD interest taxable?: Yes. Interest earned on a recurring deposit is fully taxable as income, added to your total income and taxed at your slab rate. Banks also deduct TDS (tax deducted at source) on RD interest if the total interest across your deposits with that bank crosses the annual threshold (₹40,000 for most depositors, ₹50,000 for senior citizens). The maturity value this calculator shows is before any tax — your actual post-tax return will be lower depending on your slab. You can submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.
Can I withdraw an RD before maturity?: Most banks allow premature closure of an RD, but it usually comes with a penalty — typically the interest is recalculated at a lower rate (often 0.5–1% below the contracted rate), reducing your return. Some banks also offer a loan or overdraft against the RD balance, which can be a better option than breaking it if you need funds temporarily. Partial withdrawal is generally not allowed; it is usually all or nothing. Because premature closure costs you interest, it is best to choose a monthly deposit and tenure you can sustain comfortably for the full term.
What happens if I miss a monthly RD instalment?: Missing an instalment typically attracts a small penalty per missed month, and repeated defaults can lead the bank to close the account prematurely. The exact penalty varies by bank but is usually a few rupees per ₹100 of the monthly instalment per month of delay. To avoid this, most people set up a standing instruction so the RD instalment is auto-debited from their savings account each month. If you anticipate trouble maintaining the deposit, choose a smaller monthly amount you can reliably sustain.
Is the information I enter stored anywhere?: No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — monthly deposit, interest rate, or tenure — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. The maturity figure is informational and based on the standard quarterly-compounding RD formula; your bank’s exact figure may differ slightly depending on its compounding convention and the deposit date, so confirm with the bank before relying on it for a precise goal.