Recurring Deposit (RD) Calculator
Calculate the maturity amount and interest earned on your Recurring Deposit. Plan your monthly savings effectively.
Deposit Details
Most Indian banks compound RD interest quarterly.
Maturity Amount
After 5 years
Total Investment
60 monthly deposits
Total Interest
Guaranteed returns
Wealth Distribution
RD Insights
Your total investment of ₹3,00,000 will grow to ₹3,59,664 in 5 years.
Interest makes up 16.6% of the final maturity amount.
Tax Note: The interest earned of ₹59,664 is taxable as per your income tax slab.
Year-on-Year Growth
| Year | Total Investment | Total Interest | Balance |
|---|---|---|---|
| Year 1 | ₹60,000 | ₹2,311 | ₹62,311 |
| Year 2 | ₹1,20,000 | ₹9,099 | ₹1,29,099 |
| Year 3 | ₹1,80,000 | ₹20,686 | ₹2,00,686 |
| Year 4 | ₹2,40,000 | ₹37,418 | ₹2,77,418 |
| Year 5 | ₹3,00,000 | ₹59,664 | ₹3,59,664 |
Understanding Recurring Deposits (RD)
A Recurring Deposit (RD) is a special kind of term deposit offered by banks which help people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.
Key Features of an RD
- Disciplined Savings: Encourages a regular habit of saving a fixed amount every month.
- Guaranteed Returns: The interest rate is fixed at the time of opening the RD, protecting you from market fluctuations.
- Flexibility: You can choose a tenure ranging from 6 months to 10 years depending on the bank.
- Liquidity: Premature withdrawal is allowed, though usually with a slight penalty on the interest rate.
- Loan Facility: You can typically take a loan or overdraft against your RD up to 80-90% of the deposit value.
How is RD Interest Calculated?
Most banks in India compound the interest on Recurring Deposits quarterly. This means the interest is calculated every three months and added to the principal. Because you deposit money every month, each installment earns interest for a different duration.
For example, in a 1-year RD, the first installment earns interest for 12 months, the second for 11 months, and the last installment earns interest for just 1 month.
Tax Implications
The interest earned on an RD is fully taxable as per your income tax slab. Banks will deduct TDS at 10% if the total interest earned across all branches of the bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). You can submit Form 15G/15H if your total income is below the taxable limit to avoid TDS.
Frequently Asked Questions
What is a Recurring Deposit (RD)?
A Recurring Deposit (RD) is a term deposit offered by Indian banks and post offices that helps people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.
How is RD interest calculated?
RD interest is typically compounded quarterly by most banks in India. The interest is calculated on the amount deposited each month for the remaining tenure of the deposit.
Can I change the monthly deposit amount in an RD?
No, in a standard RD, the monthly deposit amount is fixed at the time of opening the account and cannot be changed. However, some banks offer 'Flexi RD' schemes where you can vary the deposit amount within certain limits.
Is RD interest taxable?
Yes, the interest earned on a Recurring Deposit is fully taxable as per your income tax slab. Banks will also deduct TDS (Tax Deducted at Source) at 10% if the interest earned across all branches exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).
Can I withdraw money from my RD before maturity?
Yes, premature withdrawal is usually allowed, but banks typically charge a penalty (usually 0.5% to 1%) on the interest rate applicable for the period the deposit was held.