RD (Recurring Deposit) Calculator

RD interest is calculated using compound interest on each individual deposit for its remaining tenure. Each monthly deposit earns interest from the date of deposit until maturity. Most banks compound RD interest quarterly. The effective return depends on the interest rate, compounding frequency, and tenure. The last deposit earns interest for the shortest period, while the first deposit compounds the longest.

In a Fixed Deposit (FD), you invest a lump sum at once. In a Recurring Deposit (RD), you invest smaller amounts regularly over time. FDs are better when you have a large sum to invest upfront, while RDs are suited for disciplined monthly savings. Both offer guaranteed returns and similar interest rates, though FD rates are sometimes marginally higher for longer tenures.

Yes. Most banks offer an additional 0.25% to 0.75% (typically 0.50%) higher interest rate for senior citizens aged 60 and above on their Recurring Deposits, similar to Fixed Deposits. This calculator adds the senior citizen bonus to the base rate when toggled.

RD interest is taxable at your income tax slab rate. Banks deduct TDS at 10% if your total interest income from all deposits with that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). You can submit Form 15G/15H to avoid TDS if your total income is below the taxable limit. Set your tax bracket in this calculator to see post-tax returns.

If you close your RD before maturity, a penalty is typically applied — usually 0.5% to 1% reduction from the applicable interest rate. The interest is recalculated at the lower rate for the period held. Some banks may also impose a minimum holding period before allowing premature closure. Tax-saving RDs (under Section 80C) have a 5-year lock-in and do not allow early withdrawal.

A step-up strategy means increasing your monthly deposit amount by a fixed percentage each year. For example, if you start with ₹10,000/month and increase by 10% annually, your second-year deposit becomes ₹11,000/month. This helps account for rising income and inflation, and significantly boosts the maturity amount over longer tenures.

RD laddering means opening multiple RDs with staggered maturities instead of a single large RD. For example, instead of ₹10,000/month in one 5-year RD, you open five RDs of ₹2,000/month each maturing at 1, 2, 3, 4, and 5 years. This provides periodic liquidity, reduces reinvestment risk, and lets you benefit from changing interest rate environments.

If your RD earns 7% and inflation is 6%, your real return is only about 1%. After tax, real returns can become negligible or even negative. RDs are best for short-to-medium term goals where capital safety is the priority. For long-term wealth creation, equity-linked instruments typically outperform. Enable inflation adjustment in this calculator to see real returns.

RD returns are guaranteed by the bank for the committed tenure and rate. However, the rates used in this calculator are illustrative. Actual rates depend on the bank, deposit tenure, amount, and customer type. Always confirm the current rate with your bank before opening an RD. Interest rates are subject to periodic revision by banks.