A recurring deposit is the savings account with a spine: you commit to depositing a fixed amount every month for a chosen tenure, the bank compounds it quarterly at a fixed rate, and at the end you collect a lump sum. It is the natural home for goals 1–5 years out where you want zero market risk — a house down payment fund, a wedding corpus, a business seed amount — and for building the saving habit itself, since the debit happens automatically. This RD calculator projects the maturity value for any monthly instalment, rate and tenure, splitting the result into total deposited and interest earned, so you can size the monthly amount to the goal instead of guessing.
How RD interest works
Each monthly instalment earns interest from its deposit date to maturity at quarterly compounding. The standard formula treats the RD as a series of deposits: M = R × (((1+r)n − 1) / (1 − (1+r)−1/3)) with monthly rate r and n months.
Example
₹10,000/month for 3 years at 7%. Total deposited: ₹3,60,000. Maturity ≈ ₹3,99,800. Interest ≈ ₹39,800.
RD vs SIP vs FD
RD beats savings accounts on rate with zero risk, but returns lag equity SIPs over long periods. An FD suits lump sums; an RD suits monthly savers. For goals under 3 years, RDs (or FDs) beat SIPs on certainty; beyond 5–7 years, equity SIPs usually win on returns.
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Frequently asked questions
What is the RD interest rate in India?
Roughly 6.5%–7.5% at major banks, similar to FD rates for the same tenure, plus ~0.50% extra for senior citizens.
Is RD interest taxable?
Yes, at your slab rate. TDS of 10% applies if annual interest exceeds ₹50,000 (₹1,00,000 for seniors).
What happens if I miss an RD instalment?
Banks charge a penalty (typically ₹1–2 per ₹100 of instalment per month of delay) and may close the account after repeated defaults.
Can I withdraw an RD early?
Yes, with a premature-closure penalty of ~1% on the rate, similar to FDs.