RD Calculator

About RD Calculator

A Recurring Deposit (RD) is the disciplined-savings cousin of a Fixed Deposit: instead of locking a single lump sum, you commit to a fixed monthly deposit for a chosen tenure, and the bank or India Post compounds interest quarterly on each instalment from its deposit date until the RD matures. This calculator implements that math instalment-by-instalment, which means it produces the exact maturity figure your bank's RD passbook will show — not a smoothed approximation. Inputs are minimal: the monthly deposit, the annual interest rate, the tenure in months, your tax slab and the compounding frequency (defaults to quarterly, the universal Indian standard).

Why use RD Calculator

• Instalment-by-Instalment Math: The tool computes interest on each monthly contribution separately at quarterly compounding, summing them into the maturity amount. This matches every Indian bank's RD passbook to the rupee, where simpler 'annuity formulas' diverge by ₹50–₹500 over a 5-year RD.
• Quarterly Compounding by Default: SBI, HDFC, ICICI, Axis, Canara and India Post all compound RD interest once a quarter. The default reflects this; switching to monthly compounding is rare and only used by a handful of cooperative banks for marketing.
• Post-Tax Reality: RD interest is fully taxable as Income from Other Sources at your slab — there is no §80C benefit and no special exemption like NSC. The post-tax cards make the real return visible at any slab from 0% to 30%.
• TDS Awareness in the Notes: The §194A threshold of ₹40,000 (₹50,000 for senior citizens) applies to RD interest aggregated across all FDs and RDs at one bank. The notes remind you of this so a TDS deduction on your account does not surprise you mid-year.
• Premature-Closure Caveat: Most banks levy a 0.5%–1% rate penalty if you break an RD early, and some pay zero interest if closed within 6 months. The notes flag this so the maturity number is not mistaken for a guaranteed exit value.
• Browser-Only Privacy: Monthly deposit amounts, slab rate and other inputs are personal financial data. The calculator runs entirely in your browser; no input is transmitted, logged or analytics-tagged.

How to use RD Calculator

1. Enter the monthly deposit you plan to commit, in rupees — most banks have a ₹100 minimum, in multiples of ₹10 or ₹100
2. Enter the annual interest rate the bank or India Post is offering for your chosen tenure, for example 6.7 for 6.70% p.a.
3. Enter the tenure in months — Indian RDs typically run from 6 months to 10 years, in 3-month multiples
4. Confirm the compounding frequency — Quarterly is standard; switch to Monthly only if the deposit terms explicitly say so
5. Choose your tax slab to see the post-tax interest, since RD interest is fully taxable at your slab
6. Read the maturity amount, total deposited and interest earned, plus the post-tax view in the second card row
7. Use the notes section as a checklist — confirm TDS, premature-closure rules and tax declaration before booking

When to use RD Calculator

• Before opening a Recurring Deposit at a bank or India Post to confirm the maturity amount on the deposit advice
• When planning a saving sleeve for a foreseeable goal — child's school admission, annual insurance premium, festival expenses
• When deciding between an RD, a debt fund SIP, or a Tax-Saving FD as your monthly fixed-income contribution
• When sanity-checking a bank RD passbook entry against the expected balance after a few months of deposits
• When choosing the optimal tenure — most banks publish best rates at 12 or 24 months, not at the longest tenure
• When estimating the post-tax effective yield to compare against a low-cost debt index fund or a savings account sweep-in

Examples

Tips

• Always pick the tenure where the bank has its best interest rate — banks frequently publish a 'special tenure' (e.g., 444 days, 27 months) that pays more than the rates around it
• Set up a standing instruction from your salary account on a fixed date each month so the RD never misses an instalment penalty
• Submit Form 15G (under-60) or Form 15H (senior, total income below basic exemption) at the start of the financial year to skip TDS on RD + FD aggregate interest
• RD interest is fully taxable; if you are in the 30% slab, the post-tax effective yield from a 6.7% RD is only about 4.65%. Compare this against a 5-year tax-free PPF for the same disciplined-savings goal
• Avoid premature closure unless absolutely necessary — the 0.5–1% penalty plus the loss of compounding rarely offsets the benefit of early access; an emergency fund in a savings account or sweep-in is a better tool for short-notice withdrawals
• Cooperative bank RDs sometimes pay 0.5–1% above the big-bank rate, but check DICGC ₹5 lakh insurance coverage and the bank's regulatory filings before parking large sums

Frequently Asked Questions

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Glossary

Recurring Deposit (RD)

A bank or post-office savings product where the depositor commits a fixed monthly contribution for a fixed tenure, and the institution pays interest compounded quarterly. Maturity equals the sum of contributions plus accumulated interest.

Instalment-by-instalment Compounding

The method by which RDs are computed in India: each monthly contribution is treated as a separate principal that earns quarterly compounded interest from its deposit date until maturity. Maturity = sum over each instalment of (contribution × (1 + r/4)^(quarters_remaining)).

Compounding Frequency (n)

How many times per year interest is added to the balance. Indian RDs use n = 4 (quarterly) by default; some products quote n = 12 (monthly). Higher n yields a slightly higher effective annualised return.

Section 194A

The Income Tax Act provision requiring banks and India Post to deduct 10% TDS on aggregate annual interest from RDs and FDs at the same depositor-institution combination, once the threshold is breached. Threshold is ₹40,000 (₹50,000 for senior citizens); rate becomes 20% if PAN is not submitted.

DICGC Insurance

Deposit Insurance and Credit Guarantee Corporation insures bank deposits — including RDs — up to ₹5 lakh per depositor per bank in India. RDs at cooperative or small banks should be sized with this limit in mind for safety.

Form 15G / 15H

Self-declarations submitted to a bank or India Post by depositors whose total income is below the basic exemption limit, requesting non-deduction of TDS on RD/FD interest. 15G is for non-seniors, 15H for senior citizens. Must be submitted every financial year.

Premature Closure Penalty

A reduction in the applicable interest rate — typically 0.5% to 1% — applied if an RD is closed before the original maturity date. Some banks pay no interest at all if the RD is closed within the first 6 months.