RD Calculator
Calculate your Recurring Deposit Maturity Value.
Total Maturity Value
Total Invested
Total Interest Earned
Year-by-Year Breakdown
| Year | Opening Balance | Invested | Interest | Closing Balance |
|---|---|---|---|---|
| Enter details to see growth. | ||||
What is a Recurring Deposit (RD)?
A Recurring Deposit (RD) is a special kind of term deposit offered by banks 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?
The formula used for calculating RD maturity amount with quarterly compounding (standard in India) is complex:
M = P × [ (1 + r/n)^(nt) - 1 ] / ( 1 - (1 + r/n)^(-1/q) )
This calculator simplifies it by using an iterative method to simulate monthly deposits and quarterly compounding accurately.
RD vs. SIP vs. FD
Recurring Deposit (RD)
- Risk: Zero (Safe).
- Returns: Fixed (6-7%).
- Best for: Short-term goals (1-3 years) with monthly savings.
Systematic Investment Plan (SIP)
- Risk: Moderate to High.
- Returns: Variable (12-15% potential).
- Best for: Long-term wealth creation (5+ years).
Frequently Asked Questions (FAQs)
Q. Is RD interest taxable?
Yes, RD interest is fully taxable. The interest earned is added to your annual income and taxed as per your income tax slab. TDS (Tax Deducted at Source) is applicable if interest exceeds ₹40,000/year (₹50,000 for seniors).
Q. Can I break my RD prematurely?
Yes, but banks usually charge a penalty of 0.5% to 1% on the applicable interest rate for the period the deposit remained with the bank.