RD Calculator
Calculate recurring deposit maturity value and interest earned, with quarterly compounding and the TDS treatment banks apply.
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Each instalment earns for a different length of time
A recurring deposit is not one deposit earning interest for the full term. The first instalment earns for the entire period, the second for one month less, and the final instalment earns for a single month. This is why the maturity value is well below what a lump sum of the same total would produce, and why simple interest calculations on the total contributed always overstate the result.
Compounding convention
Indian banks conventionally compound RD interest quarterly, not monthly, even though instalments are monthly. Some post office schemes use their own convention. The difference is modest but real, and it is why a bank's own maturity figure may differ slightly from a generic calculator.
Missing an instalment
Banks charge a penalty for missed instalments, typically a small amount per hundred per month, and repeated defaults can lead to the account being closed prematurely with interest recalculated at the savings rate. If cash flow is uncertain, a smaller monthly commitment that you can definitely maintain is better than a larger one you might miss.
Tax treatment
RD interest is fully taxable as income from other sources at your slab rate. There is no exemption comparable to PPF. Banks deduct TDS at 10 percent once interest across your deposits with that bank exceeds the annual threshold, and at a higher rate if PAN is not provided. TDS is not the final liability: if your slab rate is higher you owe the difference, and if you are below the taxable limit you can file Form 15G or 15H to prevent deduction.
Where an RD makes sense
It suits a known expense on a known date, a fee instalment or an insurance premium, where capital certainty matters more than return. For long-horizon goals the return generally trails inflation after tax, so it is a savings instrument rather than a wealth-building one. Compare against a liquid fund or an equity SIP for anything beyond three years.
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Frequently Asked Questions
Why is my RD maturity lower than I expected?
Each instalment earns interest only from the month it is paid. The first earns for the full term and the last for one month, so the effective average holding period is roughly half the term.
How often is RD interest compounded?
Quarterly at most Indian banks, even though instalments are monthly. Some post office schemes use a different convention, which is why a bank's own figure can differ slightly from a generic calculator.
What happens if I miss an instalment?
Banks charge a penalty per month of delay, and repeated defaults can cause premature closure with interest recalculated at the lower savings rate. Choose a commitment you can reliably maintain.
Is RD interest taxable?
Yes, fully, at your slab rate as income from other sources. Banks deduct TDS at 10 percent above an annual threshold, which is not the final liability. Submit Form 15G or 15H if you are below the taxable limit.
Is an RD a good long-term investment?
Rarely. After tax the return generally trails inflation, so it suits a known expense on a known date rather than wealth building. For horizons beyond three years, compare against a liquid fund or an equity SIP.
Privacy & Security
Runs entirely in your browser. Deposit inputs are not uploaded.
How to Use
Enter your monthly RD deposit, interest rate and term in months to estimate maturity value and interest earned.
Disclaimer: This tool is provided "as is" without warranty of any kind. Results are for educational and utility purposes.
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