RD Calculator

A recurring deposit, or RD, is the disciplined saver's answer to the lump-sum fixed deposit. Instead of parking one large amount, you commit to paying a fixed installment every month for a set tenure, and the bank or post office pays interest on the steadily growing balance. At the end of the term you get back every rupee you deposited plus the interest it earned. It is the ideal way to turn a regular monthly income into a guaranteed corpus.

The signature scheme is the Post Office 5-year RD, whose rate is notified by the Government of India and revised every quarter — currently 6.7% per annum. Banks offer their own RDs over flexible tenures, with the rate fixed when you open the account.

RD interest is compounded quarterly, and the maturity value follows the standard closed form:

M = P × [ (1 + i)ⁿ − 1 ] ÷ [ 1 − (1 + i)^−1/3 ]

• M — the maturity amount paid out at the end of the tenure.
• P — your fixed monthly deposit (installment).
• i — the per-quarter interest rate = annual rate ÷ 400 (÷4 quarters, ÷100 percent→decimal).
• n — the number of quarters = tenure in months ÷ 3.

The −1/3 exponent appears because a month is one-third of a quarter: each monthly installment is grown by the quarterly rate for the fraction of the term it stays invested. Adding up every installment's growth gives exactly this geometric-series closed form. Your total deposited is simply P × months, and the interest earned is M minus that. If the rate is 0%, the formula is an indeterminate 0/0 — the limit is just your deposits, so the maturity equals P × months.

With i = 6.7 ÷ 400 = 0.01675 and n = 60 ÷ 3 = 20 quarters, the formula gives a maturity of ₹3,56,829.14 — that is ₹3,00,000.00 of your own deposits plus ₹56,829.14 of interest. The year-by-year table below is generated by the same engine that powers the calculator above, so it can never drift from the math. Watch the interest column grow each year even though your monthly deposit never changes — that is quarterly compounding rewarding the time your earlier installments stay invested.

Because every installment compounds, stretching the tenure does more than just add deposits — the interest component accelerates. Here is what a ₹5,000 monthly deposit at 6.7% grows to across common tenures:

Notice how the interest more than triples between the 3-year and 10-year rows even though the monthly amount is unchanged — that is the payoff for leaving each installment invested longer. As a sanity check on the short end, a single month's deposit at 6.7% matures to about ₹5,027.76.

A recurring deposit is one of several ways to build savings from a monthly income. The right pick depends on whether you have a lump sum or a monthly surplus, how long you can lock the money away, and how the returns are taxed:

RDs and SIPs both suit monthly savers, but an RD gives a guaranteed return while a SIP rides market returns. An FD needs a lump sum up front. PPF offers the best tax treatment but locks money for 15 years. Many savers run an RD alongside a SIP to balance certainty against growth.

RD interest is fully taxable and added to your income for the year. Banks deduct TDS once the interest across your deposits with them crosses the annual threshold, unless you submit Form 15G or 15H to declare that your total income is below the taxable limit. The maturity figure here is the gross amount before any TDS, so your in-hand value may be slightly lower depending on your tax bracket.

This tool assumes you pay every installment on time and hold the deposit to maturity. In practice, missing an installment usually attracts a small penalty and lowers the maturity value, and repeated defaults can close the account. Premature withdrawal is generally allowed but earns a reduced rate. The calculator also assumes a single fixed rate for the whole tenure — Post Office RD rates are revised quarterly, and a minority of calculators use monthly compounding, which yields a marginally higher figure.

The figures here use the same quarterly-compounding closed form published by India Post, ClearTax, BankBazaar and Scripbox, and reproduce their worked examples to the paisa. Treat the result as a faithful illustration of how a recurring deposit compounds — not as a guaranteed bank quote or as financial advice.