RD Calculator

What is an RD Calculator?

An RD calculator is a free online tool that estimates the maturity amount and total interest you'll earn on a Recurring Deposit. By entering your monthly deposit, interest rate, and tenure, the calculator shows the exact maturity value — letting you compare bank rates and pick the right tenure for your savings goal.

A Recurring Deposit (RD) is one of India's simplest savings instruments — you deposit a fixed amount every month, the bank pays a guaranteed interest rate (compounded quarterly), and you receive the maturity amount at the end of the tenure. It's the perfect product for building short-to-medium term savings discipline.

RD Maturity Formula

RD maturity is calculated using the standard recurring deposit formula with quarterly compounding:

• M = maturity amount
• R = monthly deposit
• i = quarterly interest rate (annual ÷ 4)
• n = number of quarters (months ÷ 3)

For example, a ₹5,000 monthly RD at 6.5% for 5 years would mature to roughly ₹3,55,000 — of which ₹3 lakh is your contribution and ₹55,000 is interest. The longer the tenure, the more dramatically interest accumulates.

RD Returns: How Much Will You Get?

Real numbers help. The table shows what a ₹5,000 monthly RD at 6.5% returns over different tenures:

RD vs FD vs SIP: Which is Better?

All three products solve different problems. Here's when each is the right choice:

Compare with our FD Calculator and SIP Calculator to see which suits your goal.

Benefits of RD

• Forced discipline: Auto-debit every month builds savings habit without thinking about it
• Safety: DICGC insurance up to ₹5 lakh per bank — practically risk-free
• Low entry barrier: Most banks accept RDs starting at ₹100/month; some at ₹50/month
• Flexible tenures: 6 months to 10 years — match your goal
• Loan facility: Borrow up to 90% of RD balance against the deposit
• Senior citizen benefit: Extra 0.25-0.50% interest for those above 60

Tax on RD Interest

Many investors are surprised to learn RD interest is fully taxable. Here's how it works:

• Slab-rate taxation: RD interest is added to your annual income and taxed at your marginal slab rate.
• TDS at source: Banks deduct 10% TDS if your RD interest exceeds ₹40,000 per financial year (₹50,000 for senior citizens). The threshold is computed at PAN level across all RDs in that bank.
• Form 15G / 15H: If your total income is below the taxable limit, submit Form 15G (under 60) or 15H (60+) at the start of the financial year to avoid TDS.
• ITR reporting: Always report RD interest under "Income from Other Sources" — even if no TDS was deducted.

Use our Income Tax Calculator to estimate the tax impact of your RD interest.

Tips to Maximize RD Returns

1. Compare bank rates: Small finance banks (Equitas, Suryoday, Ujjivan) offer 7-8% on RDs vs 6-6.5% at SBI/HDFC. The DICGC ₹5 lakh cover applies equally.
2. Open in name of senior citizen parent: If you have parents over 60 in lower tax slabs, having them open the RD gets you extra interest plus lower TDS.
3. Auto-debit on 1st of month: Maximizes the days your money earns interest within each quarter.
4. Choose post office RD for guaranteed safety: 6.7% (Q1 FY26), 5-year tenure, sovereign guarantee — though no premature closure flexibility.
5. Don't miss installments: Most banks charge a small late fee (1-2% of the missed instalment), and three consecutive misses can lead to RD closure.

Frequently Asked Questions

What is the minimum RD amount in India?

Most banks offer RDs starting at ₹100/month. Post Office RD starts at ₹100. Small finance banks may offer RDs starting at ₹50/month. There is no upper limit, though banks may require KYC for amounts above ₹50,000/month.

Can I close my RD before maturity?

Yes, most banks allow premature withdrawal of RDs after 3 months. The bank pays interest at the rate applicable for the actual tenure completed (which is usually lower than your booked rate), minus a 1-2% penalty. Post Office RD allows premature closure only after 3 years.

Which bank offers the highest RD interest rate?

As of 2026, small finance banks like Equitas SFB, Suryoday SFB, and Ujjivan SFB offer 7.5-8.5% RD rates. Among major banks, IDFC First, RBL, and Bandhan typically offer 7-7.5%. SBI and HDFC are at 6.5-7%. Always check rates for the specific tenure you want.

Is RD interest tax-free?

No. RD interest is fully taxable as "Income from Other Sources" at your marginal slab rate. Only PPF and SGB interest are completely tax-free in India.

What happens if I miss an RD installment?

A single missed installment usually triggers a small penalty (1-2% of the instalment, or ₹10-50 flat fee). Banks typically allow 6 months of grace. Three consecutive misses can result in RD closure with the maturity amount calculated only for the months you actually paid.

Can I increase my RD amount mid-tenure?

No. RD installment amounts are fixed at the time of opening. To save more, open a second RD (banks allow multiple RDs at different installment amounts).

RD vs SIP: Which is better?

For risk-averse short-term goals (1-3 years), RD is better — guaranteed returns, no market risk. For long-term goals (5+ years), SIP in equity mutual funds historically delivers 12-15% vs RD's 6-7% — making it dramatically better for wealth creation despite the volatility. Most balanced portfolios use both.

Is post office RD safer than bank RD?

Both are very safe. Post Office RD has full sovereign guarantee (Government of India backing) — technically safer than bank RDs. Bank RDs have DICGC insurance up to ₹5 lakh per bank. For amounts above ₹5 lakh, post office RD or splitting across multiple banks gives full safety.

Can I open an RD online?

Yes — most banks (HDFC, ICICI, SBI, Axis, Kotak) allow online RD opening through net banking or mobile apps in 2-3 minutes. Post Office RD requires offline visit unless you use the IPPB (India Post Payments Bank) app.

Are RD returns compounded monthly or quarterly?

Bank RD interest is compounded quarterly — that's the standard set by RBI. Some non-bank RDs may use yearly compounding (which gives slightly lower returns). Always check the term sheet before opening.