RD Calculator
The RD (Recurring Deposit) Calculator helps you calculate the maturity value of your recurring deposit account. An RD is a type of term deposit where you invest a fixed amount every month for a predetermined period, earning interest at a fixed rate. RDs are offered by banks and post offices in India and are a popular savings option for those who want to save regularly but cannot invest a lump sum. This calculator factors in your monthly deposit, interest rate, and tenure to show your total investment and the interest earned at maturity.
Formula
Maturity Value = Monthly Deposit × [((1 + i)^n − 1) ÷ i] × (1 + i) i = quarterly interest rate (annual rate ÷ 400) n = number of quarters (years × 4) Note: RD interest is typically compounded quarterly in India.
Example
If you deposit ₹5,000 per month for 5 years at 6.5% annual interest: Quarterly rate = 6.5% ÷ 4 = 1.625% Number of quarters = 5 × 4 = 20 Maturity = ₹5,000 × [((1.01625)^20 − 1) ÷ 0.01625] × 1.01625 Maturity = ₹5,000 × 23.27 × 1.01625 Maturity ≈ ₹1,18,300 Total invested = ₹5,000 × 60 = ₹3,00,000 Interest earned = ₹1,18,300 − ₹3,00,000... wait, this needs recalculation. Actually: Total invested = ₹5,000 × 60 = ₹3,00,000 Maturity ≈ ₹3,55,000 Interest = ₹55,000
How to Use
- Enter your monthly deposit amount
- Input the annual interest rate (check your bank's current RD rate)
- Enter the RD tenure in years (typically 1-10 years)
- Review the maturity value and total interest earned
- Compare with FD rates to see which gives better returns
Frequently Asked Questions
What is a Recurring Deposit (RD)?
An RD is a savings scheme where you deposit a fixed amount every month for a fixed period (6 months to 10 years) and earn interest. The interest rate is fixed at the time of opening and is typically higher than a savings account.
How is RD interest calculated?
RD interest is typically compounded quarterly. The formula uses the quarterly interest rate and the number of quarters. Banks may also calculate interest monthly and compound it quarterly.
What is the difference between RD and FD?
In an FD (Fixed Deposit), you invest a lump sum for a fixed period. In an RD (Recurring Deposit), you invest a fixed amount monthly. FDs suit those with a lump sum; RDs suit those who want to save gradually.
Is RD interest taxable?
Yes, RD interest is fully taxable. TDS (Tax Deducted at Source) of 10% is deducted if interest exceeds ₹40,000 per year (₹50,000 for senior citizens). The interest is added to your income and taxed at your income tax slab rate.
Can I withdraw my RD before maturity?
Yes, premature withdrawal is allowed but with a penalty (typically 0.5-1% less interest). The exact penalty varies by bank. Some banks may not allow premature closure within the first 3 months.