RD Calculator — Recurring Deposit Maturity Value
RD maturity value with bank-standard quarterly compounding.
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How Each Monthly Installment Compounds Separately
Unlike an FD's single lumpsum, an RD's maturity value is the sum of every individual installment's own compound growth, each compounded quarterly for whatever time remains between its deposit date and maturity — matching the method Indian banks use to quote RD returns. This calculator runs that same installment-by-installment calculation, which is why the projected figure closely matches what a bank's own RD quote would show for the same amount, rate and tenure.
Why an RD Earns Less Than an FD at an Identical Rate
In a fixed deposit, the entire principal is invested from day one and earns interest for the full tenure. In a recurring deposit, only the very first installment gets that full-tenure treatment — the second-to-last installment earns interest for barely a month before maturity. At the same quoted rate and the same total amount deposited, an RD's total interest is always lower than an FD's, simply because the average rupee spends less time actually invested.
What Happens If an Installment Is Missed
Banks charge a small penalty per missed installment — the exact amount varies by bank — and closing the RD altogether becomes likely after several consecutive misses. Some banks offer flexible-RD variants that permit variable deposit amounts without a missed-installment penalty — worth checking if your monthly cash flow isn't perfectly steady, since a standard RD assumes a fixed amount debits on the same date every month.
What is a recurring deposit and how is maturity calculated?
A Recurring Deposit (RD) lets you save a fixed amount every month with a bank at a guaranteed interest rate — a fixed deposit built one installment at a time. This calculator uses the exact method Indian banks use: each monthly installment earns compound interest, compounded quarterly, for its own remaining tenure, and the maturity value is the sum of all installments' grown values. Your first deposit compounds for the full tenure; your last one for barely a month. That is also why an RD's total interest is always lower than an FD of the same rate and total amount — the average rupee simply spends less time invested.
Where RDs fit: disciplined saving for near-term goals
RDs shine for goals 1–5 years away where the amount must be certain: a wedding, a home down payment, school fees, an emergency fund top-up. The bank auto-debits your account each month, which enforces discipline the way a SIP mandate does — but with zero market risk and a return known to the rupee on day one. Missing an installment attracts a small penalty (typically ₹1–2 per ₹100 per month) and repeated defaults can close the account, so set the debit date just after your salary credit. Most banks allow tenures from 6 months to 10 years; senior citizens usually earn 0.25–0.50% extra.
RD vs FD vs SIP: picking the right instrument
Choose an RD when you're saving monthly and need a guaranteed outcome; choose an FD when you already have the lumpsum, since the full amount compounds from day one; choose an equity SIP when the goal is 5-plus years away and you can accept fluctuation in exchange for historically higher returns. RD interest is taxed at your slab rate with TDS above the bank's threshold, and offers no Section 80C benefit — so for long horizons, tax-free options like PPF often beat an RD after tax. Run the same monthly amount through our SIP and PPF calculators to see all three outcomes side by side.
Frequently asked questions
How is RD maturity calculated?
Each monthly installment earns compound interest for its remaining tenure at quarterly compounding — the method Indian banks use. The calculator sums the maturity value of every installment, so the result matches your bank's quote closely.
Why is my RD interest less than an FD at the same rate?
In an FD the full amount earns interest from day one. In an RD, only your first installment stays invested for the whole tenure — the last one earns interest for just a month. Same rate, less average time invested.
Is RD interest taxable?
Yes, RD interest is taxed at your slab rate, and TDS applies once total interest crosses the bank's threshold (₹50,000 for most depositors). RD offers no Section 80C deduction, unlike a 5-year tax-saver FD.
What happens if I miss an RD installment?
Banks charge a small penalty per missed installment (typically ₹1–2 per ₹100 per month) and may close the RD after several consecutive defaults. Some banks offer flexible RDs that allow variable deposits without penalty.
RD or SIP — which is better?
An RD gives a guaranteed, fixed return and suits short horizons or zero risk tolerance. A SIP in equity funds has historically returned more over 5+ years but fluctuates. Many savers use RDs for near-term goals and SIPs for long-term wealth — compare both with our SIP calculator.