RD Calculator

Build Savings Month by Month With the RD Calculator

Not everyone has a large amount to invest at once, and not everyone is comfortable with market risk. A recurring deposit, or RD, is built for exactly that situation: you deposit a fixed amount every month, the bank or post office pays you interest on it, and at the end of the tenure you receive the total deposits plus interest. The RD calculator on this page shows you that maturity value instantly, so you can see what a small monthly habit is really worth over one, three or five years.

RDs are among India's most popular savings products, especially for salaried employees, students, homemakers and first time savers. They need no market knowledge, no lump sum, and no risk to principal. Saving Rs 2,000 or Rs 5,000 a month turns discipline into a meaningful sum for a holiday, a two wheeler down payment, school fees, or an emergency fund.

What Is a Recurring Deposit?

A recurring deposit is a term deposit where you invest a fixed amount every month for a fixed tenure, instead of depositing a lump sum once as in a fixed deposit (FD). Each monthly instalment earns interest from the month it is deposited until maturity, compounded monthly by most Indian banks and the post office. At maturity, you receive the sum of all your deposits plus the interest earned on each instalment.

RDs are offered by all major banks, small finance banks and India Post. Bank tenures range from 6 months to 10 years, while the post office RD has a fixed 5 year tenure extendable by another 5 years. Minimum monthly deposit is usually Rs 100 at the post office and Rs 500 to Rs 1,000 at banks, with no upper limit. Senior citizens generally earn an extra 0.50 percent a year at banks.

RD interest is guaranteed at the time of opening: the rate you sign up for stays fixed for your tenure even if rates fall later. That certainty is the main reason risk averse savers prefer RDs over market linked products, even though the returns are lower.

How the RD Calculator Works

Indian banks and the post office calculate RD maturity using monthly compounding. Each monthly instalment is treated as a separate deposit that compounds for the time remaining until maturity. The formula is:

M = Sum of R x (1 + i)^{(months remaining)} for each instalment

• R is the monthly instalment, for example Rs 5,000.
• i is the monthly interest rate, which is the annual rate divided by 12 and by 100. At 6.7 percent a year, i is 0.00558.
• Months remaining counts from each instalment's deposit month to maturity. The first instalment compounds for the full tenure, while the last instalment compounds for only about a month.

This is why early instalments matter most: money deposited early earns interest for years, while money deposited near the end barely earns anything. It also explains why an RD's effective return feels lower than the headline rate: your average money is invested for only about half the tenure, since instalments go in gradually.

The calculator applies exactly this method, so its results match how banks and the post office compute maturity, subject to small rounding differences in how individual institutions treat part months.

Worked Example: Rs 5,000 a Month for 5 Years at 6.7 Percent

Suppose Meera opens a post office RD with Rs 5,000 a month for 60 months at 6.7 percent a year, compounded monthly. Here is the result:

• Total deposited: Rs 5,000 x 60 = Rs 3,00,000
• Maturity value: approximately Rs 3,57,182
• Interest earned: Rs 3,57,182 - Rs 3,00,000 = Rs 57,182

Meera's discipline of Rs 5,000 a month produces nearly Rs 57,000 of interest on top of her deposits, with zero market risk. Now compare a shorter, higher rate example: Rs 10,000 a month for 3 years (36 months) at 7 percent a year, compounded monthly::

• Total deposited: Rs 10,000 x 36 = Rs 3,60,000
• Maturity value: approximately Rs 4,01,630
• Interest earned: Rs 4,01,630 - Rs 3,60,000 = Rs 41,630

Notice the 5 year RD earns more interest in absolute terms even though the monthly amount is half, because the money stays invested much longer. Tenure is the quiet multiplier in RDs. Try it: increase the tenure by a year or two and watch the interest climb.

How to Use This RD Calculator

1. Enter the amount you will deposit every month.
2. Enter the annual interest rate offered by your bank or post office. For the post office 5 year RD, the rate for October to December 2026 is 6.7 percent.
3. Enter the tenure in years.
4. Read your results: maturity value, total deposited, and interest earned.
5. Compare tenures and monthly amounts to find the combination that reaches your goal amount.

Post Office RD vs Bank RD

Both are safe, but they differ in useful ways:

Post Office RD

Fixed 5 year tenure, extendable by 5 more years. Rate 6.7 percent a year for October to December 2026, compounded monthly and reviewed every quarter by the government. Minimum Rs 100 a month in multiples of Rs 10, no maximum. Fully backed by the Government of India. Premature closure allowed after 3 years. A loan up to 50 percent of the balance is available after 12 instalments. No tax benefit on deposits; interest is taxable.

Bank RD

Flexible tenures from 6 months to 10 years, so you can match the RD to a goal date. Rates vary by bank and tenure, generally 6 to 7.5 percent for regular citizens, with seniors earning about 0.50 percent extra. Minimum deposits are usually Rs 500 to Rs 1,000 a month. Premature withdrawal is allowed with a penalty, usually a lower interest rate. Bank deposits are DICGC insured up to Rs 5 lakh per depositor per bank, including principal and interest.

Which is better depends on your need. For a fixed 5 year discipline with a government backed rate, the post office RD is hard to beat. For a 1 or 2 year goal, a bank RD fits better.

Current RD Interest Rates (Indicative)

Rates change over time, so confirm with your bank or post office before opening an account. Recent indicative rates:

Institution	1 Year	2 Years	5 Years
Post Office	Not offered	Not offered	6.7 percent
SBI	About 6.0 percent	About 6.5 percent	About 6.5 percent
HDFC Bank	About 6.0 percent	About 6.6 percent	About 7.0 percent
ICICI Bank	About 6.0 percent	About 6.5 percent	About 7.0 percent

These figures are indicative and vary by deposit amount, tenure slab and customer category. Senior citizens typically earn 0.50 percent more at banks. Small finance banks sometimes offer higher RD rates, but check their tenure conditions and DICGC coverage before choosing on rate alone.

Tax on RD Interest

RD interest is fully taxable as income from other sources at your slab rate. There is no tax benefit on deposits and no exemption on interest. Banks deduct 10 percent TDS if your total bank deposit interest exceeds Rs 40,000 in a year (Rs 50,000 for senior citizens), but TDS is not the final tax: declare the full interest in your return, pay tax at your slab, and claim credit for TDS deducted. If your income is below the taxable limit, submit Form 15G or 15H to avoid TDS.

This tax treatment is one reason RDs suit lower income savers best. If you are in the 30 percent slab, a 7 percent RD gives you only about 4.9 percent after tax, which may barely beat inflation. Higher bracket investors often prefer PPF, which is fully tax free, or equity products with lower effective tax on long term gains, for long term goals.

Factors That Affect Your RD Maturity Value

• Monthly instalment: The most direct lever. Doubling the instalment roughly doubles the maturity value, since interest scales with deposits.
• Interest rate: A 0.5 percent higher rate adds a few thousand rupees on a 5 year RD of Rs 5,000 a month. Worth comparing banks, but not worth chasing small differences at the cost of convenience.
• Tenure: Longer tenure means more compounding and more total deposits. A 5 year RD earns far more interest than two back to back 2.5 year RDs at the same rate, because the early instalments compound longer.
• Compounding frequency: Monthly compounding, used by Indian banks and the post office, gives slightly more than annual compounding and slightly more than quarterly compounding. The difference is small but real.
• Missed instalments: A missed instalment usually attracts a small penalty and lowers maturity value, since that month's money never earns interest. Too many can lead to premature closure.

Benefits of a Recurring Deposit

• Zero market risk: principal and rate are fixed at opening.
• Builds a savings habit with a small, affordable monthly amount.
• No lump sum needed, ideal for salaried earners and first time savers.
• Flexible tenures at banks, from 6 months to 10 years.
• Government backing for post office RDs and DICGC insurance up to Rs 5 lakh at banks.
• Loan facility against the RD balance in emergencies, so you do not have to break it.

Common Mistakes to Avoid

• Setting the instalment too high: An ambitious Rs 10,000 a month that you cannot sustain leads to missed instalments, penalties and possible closure. Start with an amount you can pay comfortably even in a tight month.
• Ignoring the tax bite: Comparing a 7 percent RD with a 7.1 percent PPF on headline rates is misleading, because PPF interest is tax free and RD interest is fully taxable. Compare post tax returns.
• Breaking the RD early for small needs: Premature closure usually costs you interest and sometimes a penalty. Keep a separate emergency fund in a savings account or liquid fund so small surprises do not force you to break a long term RD.
• Forgetting the deposit date: Set the RD deduction a day or two after your salary credit date, so the instalment never bounces for lack of balance.
• Not nominating a beneficiary: Add a nominee at opening. It costs nothing and saves your family significant paperwork later.

Limitations of the RD Calculator

This calculator assumes every instalment is paid on time, the interest rate stays constant, and compounding is monthly. Real outcomes differ slightly if you miss instalments, if your bank uses a different rounding method for part months, or if TDS is deducted during the tenure. The maturity value shown is before tax: the interest portion is taxable at your slab rate, so your post tax receipt will be lower. Use the calculator for planning and goal setting, and confirm the exact maturity figure with your bank or post office statement.

RD vs Other Savings Options

Feature	RD	Fixed Deposit	PPF	Mutual Fund SIP
Investment pattern	Fixed monthly instalments	One time lump sum	Yearly, up to Rs 1.5 lakh	Fixed monthly instalments
Returns	6 to 7.5 percent, guaranteed	6 to 7.5 percent, guaranteed	7.1 percent, government set	10 to 12 percent expected, market linked
Risk	Nil	Nil	Nil	Moderate to high
Tax on returns	Taxed at slab rate	Taxed at slab rate	Fully tax free	LTCG 12.5 percent above Rs 1.25 lakh a year
Lock in	Fixed tenure, penalty on early exit	Fixed tenure, penalty on early exit	15 years	None for open ended funds
Best for	Short to medium goals, first savers	Idle lump sums, capital safety	Long term tax free savings	Long term wealth creation

If you have a lump sum rather than a monthly surplus, an FD calculator models that option. If your goal is 15 years away and tax free returns matter, compare with a PPF calculator. If you are comfortable with market risk for higher long term growth, a SIP calculator shows the mutual fund route. And if you want to see what a one time investment could become, try the lumpsum calculator. For monthly income after retirement, our SWP calculator covers the withdrawal side.

Frequently Asked Questions

What is the post office RD interest rate?

The post office 5 year RD pays 6.7 percent a year, compounded monthly, for October to December 2026. Rates are reviewed every quarter by the government, so check the current notification before opening an account.

How is RD maturity calculated?

Each monthly instalment earns interest compounded monthly from the month it is deposited until maturity. The maturity value is the sum of all instalments plus the interest on each one. The first instalment earns the most interest and the last one the least.

What happens if I miss an RD instalment?

Banks and the post office usually charge a small penalty for a missed instalment, and the maturity value will be slightly lower because that month's money never earned interest. Repeated defaults can lead to premature closure of the account.

Can I close my RD before maturity?

Yes, premature closure is allowed, but usually with a penalty in the form of a lower interest rate. Post office RDs can be closed after the account has run for 3 years. Check your bank's specific rules before breaking an RD.

Is RD interest taxable?

Yes. RD interest is taxed as income from other sources at your slab rate. Banks deduct 10 percent TDS if your total bank deposit interest exceeds Rs 40,000 in a year (Rs 50,000 for senior citizens), but TDS is adjusted against your final tax liability.

Can I take a loan against my RD?

Yes. The post office allows a loan of up to 50 percent of the RD balance after 12 instalments have been paid. Most banks offer similar overdraft or loan facilities against RD balances.

Is an RD better than a SIP?

It depends on your goal and risk appetite. RDs offer guaranteed, risk free returns around 6 to 7.5 percent, ideal for short term goals and capital safety. SIPs in equity funds have historically returned more over long periods but carry market risk and no guarantee. For a 5 year plus goal where you can tolerate volatility, SIPs usually build more wealth; for a goal within 3 years, an RD is the safer choice.

Conclusion

A recurring deposit will not make you rich, and it is not supposed to. Its job is simpler: turning a small monthly habit into a reliable sum, with no risk and no market knowledge required. Rs 5,000 a month becomes about Rs 3,57,182 in five years at post office rates, available exactly when planned. Match an amount and tenure to your next goal, set the deduction just after salary day, and let the habit do its quiet work. For long term wealth, pair the RD with higher growth options. For short term certainty, few products beat it.