RD Calculator

What is a Recurring Deposit?

A Recurring Deposit (RD) lets you deposit a fixed amount every month for a chosen tenure and earn interest at a stated rate. It suits savers who prefer disciplined monthly deposits instead of a single lump sum.

How this RD calculator works

Enter the monthly deposit, annual rate and number of years. The calculator treats each monthly deposit as invested at the start of the month, compounds it monthly, and shows total deposited versus interest earned. Figures are indicative only, not advice.

Why choose a recurring deposit?

An RD is built for people who earn a monthly salary and want to save a fixed sum every month without thinking about it. Unlike a fixed deposit, you don't need a lump sum upfront — you commit to a small, regular instalment. Because the interest rate is locked at booking and the principal is guaranteed, an RD is one of the safest ways to build a corpus for a defined short- to medium-term goal such as a gadget, a family trip, insurance premiums or an emergency buffer. Most banks offer RD tenures from 6 months to 10 years, and the rate is usually the same as their fixed-deposit rate for a matching tenure.

RD vs FD vs SIP — which should you pick?

• RD — save a fixed amount monthly, guaranteed return, ideal when you don't have a lump sum. Returns are modest and fully taxable.
• FD — invest a lump sum once, marginally better effective return than an RD for the same money because the full amount earns interest from day one. Compare with the FD calculator.
• SIP in mutual funds — also a monthly habit, but market-linked and potentially higher-return over the long term, with more risk. See the SIP calculator.

A common approach is to use an RD for short-term, capital-safe goals and a SIP for long-term wealth creation where you can ride out volatility.

How RD interest is taxed

Interest earned on a recurring deposit is fully taxable and added to your income under "income from other sources" at your slab rate. Banks deduct TDS at 10% once interest across your deposits at that bank crosses ₹40,000 in a year (₹50,000 for senior citizens). If your income is below the taxable limit, submit Form 15G/15H to avoid TDS, but still report the interest in your return and reconcile it against your AIS. Unlike a tax-saving FD, an ordinary RD does not qualify for any Section 80C deduction.

Things to keep in mind

• Missed instalments usually attract a small penalty and, if you miss several in a row, the bank may close the account prematurely.
• Premature closure is allowed but the interest is recalculated at a lower rate, reducing your maturity value.
• Compounding frequency: banks generally compound RD interest quarterly, so your bank's figure may differ slightly from this estimate.
• Auto-debit from your savings account keeps the RD on track and avoids missed-instalment penalties.