RD Calculator
Calculate Recurring Deposit maturity amount and interest earned with quarterly compounding
🏦 Recurring Deposit Details
📖 Complete Guide to Recurring Deposit in India
A Recurring Deposit (RD) is the perfect savings tool for salaried individuals who want to build a corpus through monthly contributions with guaranteed returns. Unlike FDs that require a lumpsum, RDs let you invest a fixed amount every month — as low as ₹100 — and earn compound interest.
📊 RD Interest Rates — Bank-wise Comparison
| Bank | 1 Year | 2 Years | 5 Years | Senior Citizen (+) |
|---|---|---|---|---|
| SBI | 6.80% | 7.00% | 6.50% | +0.50% |
| HDFC Bank | 6.60% | 7.10% | 7.00% | +0.50% |
| Post Office | 6.70% | 6.70% | 6.70% | N/A |
| AU Small Finance | 7.50% | 7.50% | 7.25% | +0.50% |
💰 RD Maturity Examples
| Monthly Deposit | Tenure | Rate | Total Deposited | Maturity Amount | Interest Earned |
|---|---|---|---|---|---|
| ₹1,000 | 1 Year | 7.0% | ₹12,000 | ₹12,431 | ₹431 |
| ₹5,000 | 3 Years | 7.0% | ₹1,80,000 | ₹2,00,568 | ₹20,568 |
| ₹10,000 | 5 Years | 7.0% | ₹6,00,000 | ₹7,25,811 | ₹1,25,811 |
🆚 RD vs FD vs SIP
| Factor | RD | FD | SIP |
|---|---|---|---|
| Investment | Monthly fixed amount | One-time lumpsum | Monthly in mutual funds |
| Returns | 6-8% guaranteed | 6-8% guaranteed | 10-15% (market-linked) |
| Risk | Zero | Zero | Market risk |
| Liquidity | Premature closure with penalty | Premature closure with penalty | Redeem anytime (no penalty) |
| Best For | Monthly savings, short-term | Lumpsum, short-term | Long-term wealth |
💡 RD Investment Tips
- Set up auto-debit: Link your RD to salary account for automatic monthly deduction
- Compare bank rates: Small finance banks offer 0.5-1% higher rates than large banks
- Consider FD if you have lumpsum: FD earns more total interest than RD for same rate and tenure
- For long-term goals: SIP in mutual funds gives significantly higher returns over 5+ years
- Never miss installments: Missing 3 consecutive payments may auto-close your RD
❓ Frequently Asked Questions
Q: What is a Recurring Deposit (RD)?
A: A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a chosen tenure (6 months to 10 years). Interest is compounded quarterly, and you receive the total maturity amount at the end. RDs combine regular savings discipline with guaranteed returns.
Q: How is RD interest calculated?
A: RD interest uses quarterly compounding. Each monthly deposit earns compound interest from its deposit date until maturity. The effective formula: Maturity = P × [(1 + r/4)^(4×n) - 1] / [1 - (1+r/4)^(-1/3)], where P = monthly deposit, r = annual rate, n = years.
Q: What is the current RD interest rate?
A: RD rates vary by bank: SBI offers 6.50-7.00%, HDFC Bank 7.00-7.10%, Post Office 6.70%, AU Small Finance Bank 7.50-8.00%. Senior citizens typically get 0.25-0.50% extra. Rates change quarterly — check with your bank for current rates.
Q: RD vs FD — which is better?
A: FD is better if you have a lumpsum (earns more interest since full amount compounds from day 1). RD is better for monthly savings from salary. Both offer same interest rates and guaranteed returns. Choose based on whether you have a lumpsum or want to save monthly.
Q: Is RD better than SIP?
A: RD offers guaranteed returns (6-8%) with zero risk. SIP in equity mutual funds offers higher potential returns (12-15% CAGR) but with market risk. For short-term goals (1-3 years), RD is safer. For long-term wealth creation (5+ years), SIP typically outperforms.
Q: Can I withdraw RD before maturity?
A: Yes, premature withdrawal is allowed but banks charge a penalty (0.5-1% reduction in applicable rate). Some banks allow partial withdrawal. You can also take a loan against RD (up to 90% of deposit) at 1-2% above RD rate.
Q: Is RD interest taxable?
A: Yes, RD interest is taxable at your income tax slab rate. Banks deduct TDS at 10% if annual interest exceeds ₹40,000 (₹50,000 for seniors). Submit Form 15G/15H to avoid TDS if your total income is below taxable limit.
Q: What is the minimum RD amount?
A: Most banks allow RD starting from ₹100/month. SBI minimum is ₹100, HDFC Bank is ₹1,000, Post Office is ₹100 (in multiples of ₹10). There is usually no maximum limit.
Q: Can I increase my RD amount?
A: Generally, RD amount is fixed for the entire tenure once opened. You cannot increase the monthly amount mid-tenure. However, you can open a new RD with a higher amount alongside the existing one.
Q: What happens if I miss an RD installment?
A: Banks charge a penalty (usually ₹1-2 per ₹100 per month of default). If you miss 3 consecutive installments, the RD may be automatically closed. Some banks allow re-activation with penalty payment.
Q: Post Office RD vs Bank RD — which is safer?
A: Both are very safe. Bank RDs are insured up to ₹5 lakh under DICGC. Post Office RDs are backed by the Government of India with no upper limit on guarantee. Post Office RD is technically the safest option.
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