RD Calculator
Calculate recurring deposit maturity value and total interest from your monthly deposit, interest rate and tenure, with quarterly compounding.
How recurring deposit interest is calculated
In a recurring deposit you invest a fixed amount every month, and the bank compounds interest
quarterly — the standard convention. Each instalment therefore grows independently
for however long it stays invested:
Maturity = Σ P × (1 + r/400)4 × m ⁄ 12
summed over every monthly deposit P, where r is the annual rate in
percent and m is the number of months that particular deposit remains invested — the
first instalment for the full tenure, the last for just one month.
Worked example
Deposit 5,000 per month at 7% per year for 5 years
(60 instalments). The first deposit compounds for 60 months and grows to
5,000 × (1.0175)20 ≈ 7,074; the last compounds for one month and grows to about 5,029.
Summing all 60 gives a maturity value of roughly 359,700 against 300,000 deposited —
about 59,700 of interest.
Why an RD earns less than an FD at the same rate
Your money enters gradually, so on average it is invested for only about half the tenure. The same
300,000 parked up-front in a 5-year FD at 7% would earn about 124,400 in interest versus the RD's
59,700. The RD's advantage is that you never needed the lump sum in the first place: it converts
monthly savings into a disciplined, guaranteed-return habit.
Assumptions
- Every instalment is paid on the due date; missed months reduce the maturity value and may attract penalties.
- The rate is fixed for the full tenure, as is standard for bank RDs.
- Interest shown is pre-tax; RD interest is usually taxable as income.
Frequently asked questions
How is RD maturity calculated?
Each monthly deposit compounds quarterly for the months it stays invested: a deposit that remains for m months grows to P (1 + r/400)4m/12. The maturity value is the sum of that expression over every instalment — exactly what this calculator computes, matching the standard bank method.
Why is RD interest less than an FD at the same rate?
In an FD the whole amount earns interest for the full tenure. In an RD only the first instalment does — the last one earns for just a month. On average your money is invested for about half the tenure, so total interest is roughly half of what the same total in an FD would earn.
What happens if I miss an RD instalment?
Banks typically charge a small penalty per missed month and may close the RD after several consecutive defaults. The maturity value also drops because the missed deposit never earns interest. This calculator assumes every instalment is paid on time.
Is RD interest taxable?
Yes, in most countries RD interest is taxed as ordinary income, and tax may be deducted at source above a threshold. The maturity value shown here is pre-tax.
RD vs SIP — which is better?
An RD gives a guaranteed, fixed return (typically 6–8%) and suits short-term goals. A SIP into equity funds is market-linked: historically higher over long periods but with no guarantee and real short-term downside. Many savers use RDs for goals under 3 years and SIPs beyond that.