RD Calculator
Recurring Deposit Maturity Calculator — Post Office & Bank RD
Calculate how much your monthly RD deposits will grow to at maturity. Uses quarterly compounding as per RBI norms — the standard for all Indian bank and Post Office RDs.
What Is a Recurring Deposit (RD)?
A Recurring Deposit (RD) is a savings product offered by banks and the Post Office that allows you to deposit a fixed amount every month for a predetermined tenure. At the end of the tenure, you receive the total deposited amount plus the interest earned — known as the maturity amount.
RDs are ideal for people with regular monthly income who want a disciplined, guaranteed savings vehicle without the volatility of market-linked instruments. They offer higher interest rates than regular savings accounts and are entirely safe, as they are backed by banks (up to ₹5 lakh per depositor under DICGC insurance) or the Government of India (Post Office RD).
Unlike Fixed Deposits, where you invest a lump sum, RDs let you start small — some banks allow RDs from as little as ₹100/month. This makes them accessible to first-time savers and students building the habit of regular saving.
How to Use This RD Calculator
- Monthly Deposit: Enter the fixed amount you plan to deposit each month. You can type numbers with or without commas.
- Annual Interest Rate: Enter the rate offered by your bank or Post Office. The Post Office 5-year RD rate is 6.7%. Most bank RDs range from 6% to 7.5% depending on tenure and the institution.
- Tenure: Enter the duration of the RD. Switch the unit between years and months using the dropdown for shorter-term RDs.
- Read Results: The calculator shows maturity amount, total amount deposited, total interest earned, and the ROI (return on investment) as a percentage.
RD Calculation Formula
RD interest in India is compounded quarterly per RBI guidelines. Each monthly installment earns compound interest from its deposit month until maturity:
M = P × [(1 + r/4)^(4t/12)] for each installment, summed for all installments
Where:
- M = Maturity amount
- P = Monthly RD installment
- r = Annual interest rate (as decimal)
- t = Remaining months until maturity for that installment
This calculator uses the formula: for each of the n monthly installments, the maturity value is P × (1 + r/400)^(quarters remaining), where quarters remaining = floor((months_left − 1) / 3) + 1.
RD Maturity Reference Table
Approximate maturity amounts for a ₹5,000/month RD at different rates and tenures:
| Tenure | 6.5% p.a. | 6.7% p.a. | 7.0% p.a. | 7.5% p.a. |
|---|---|---|---|---|
| 1 Year | ₹61,775 | ₹61,856 | ₹61,987 | ₹62,199 |
| 2 Years | ₹1.30 L | ₹1.30 L | ₹1.30 L | ₹1.31 L |
| 3 Years | ₹2.01 L | ₹2.02 L | ₹2.03 L | ₹2.04 L |
| 5 Years | ₹3.54 L | ₹3.56 L | ₹3.59 L | ₹3.63 L |
Total deposited over 5 years at ₹5,000/month = ₹3 lakhs. The extra amount is the quarterly compounded interest.
RD Calculation Examples
Example 1: Post Office 5-Year RD
Kavita deposits ₹10,000/month in a Post Office RD at 6.7% for 5 years. Total deposited: ₹6 lakhs. Maturity amount: approximately ₹7.12 lakhs. Interest earned: ₹1.12 lakhs (taxable as per her slab).
Example 2: Short-Term Bank RD
Rohan wants to save for a vacation in 18 months. He starts a ₹8,000/month RD at 7.0% for 18 months. He deposits ₹1.44 lakhs total and receives approximately ₹1.51 lakhs at maturity — ₹7,300 in interest.
Example 3: Senior Citizen RD
Mrs. Sharma, a senior citizen, deposits ₹20,000/month in a bank RD at 7.5% (most banks offer 0.25–0.5% extra for senior citizens) for 3 years. She accumulates approximately ₹7.76 lakhs on ₹7.2 lakhs invested — with TDS applicable only if interest exceeds ₹50,000/year.
RD Tips and Best Practices
- Post Office RD vs Bank RD: Post Office RD offers a government-guaranteed rate of 6.7% for 5 years. Bank RD rates vary and can be higher for certain tenures or for senior citizens.
- Senior citizen benefit: Most banks offer 0.25% to 0.5% additional interest for senior citizens on RDs. Always check if you qualify.
- TDS on RD interest: Interest is added to your income and taxed per slab. TDS at 10% is deducted if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G/15H to avoid TDS if you are in the nil tax bracket.
- Avoid premature closure: Premature closure incurs a penalty of 1–2% on applicable rates. Plan your RD tenure carefully around your actual cash-flow needs.
- Use RD for goal-based saving: RDs are excellent for short-to-medium-term goals like a down payment, vacation, or appliance purchase over 1–5 years.
- Compare with SIP: For tenures of 5+ years with higher risk tolerance, equity SIPs historically outperform RDs significantly. RDs are better for capital protection and guaranteed returns.
Frequently Asked Questions
An RD is a savings scheme where you deposit a fixed amount monthly for a set tenure. Banks and Post Offices offer RDs with guaranteed returns, making them a safe and disciplined savings tool for regular income earners.
The Post Office RD rate for 5-year deposits is 6.7% per annum (Q1 2026), compounded quarterly. Bank RD rates vary from 6% to 7.5% depending on the bank, tenure, and whether the depositor is a senior citizen.
RD interest is compounded quarterly as per RBI guidelines. Each monthly installment earns compound interest from the month of deposit until maturity. The quarterly compounding means your effective yield is slightly higher than the nominal annual rate.
Yes, RD interest is taxable per your income tax slab. TDS is deducted at 10% if annual interest from all deposits at a bank exceeds ₹40,000 (₹50,000 for senior citizens). You can submit Form 15G (for those below 60) or Form 15H (senior citizens) to avoid TDS if your total income is below the taxable limit.
The minimum monthly deposit for a Post Office RD is ₹100 with no maximum limit. The mandatory tenure is 5 years. It can be extended for another 5 years after maturity by submitting a request before the maturity date.
Yes, most banks allow premature closure of RD after a minimum period (usually 3 months). A penalty of 1–2% is typically deducted from the applicable interest rate. For Post Office RD, premature closure is allowed after 3 years with a 2% penalty on the applicable rate. Plan your tenure carefully to avoid this penalty.
An FD (Fixed Deposit) requires a one-time lump sum investment, while an RD allows you to invest a fixed amount every month. RDs are ideal for people who want to save regularly from monthly income, while FDs suit those with a large amount to invest at once. Both offer guaranteed returns and similar interest rates for comparable tenures.