Recurring Deposit (RD) Calculator
Calculate the maturity amount of your Recurring Deposit with quarterly compounding — the standard method used by all Indian banks. Includes an optional 0.5% bonus for senior citizens, which most banks offer.
How this calculator works
A Recurring Deposit (RD) is a disciplined savings product where you deposit a fixed amount every month for a chosen tenure, and the bank pays compound interest quarterly. Popular for goal-based saving — buying a phone, a trip, or just building emergency funds.
How the math works
Banks calculate RD interest using quarterly compounding:
At the end of every quarter, interest is added to the running balance based on the quarterly rate (annual rate ÷ 4).
Each month's deposit earns interest only for the remaining tenure, so your first deposit earns much more total interest than your last.
Typical 2026 RD rates
- SBI — 6.5-7.0% (1-10 years)
- HDFC Bank — 6.5-7.25%
- ICICI Bank — 6.5-7.25%
- Post Office RD — 6.7% (fixed, government-guaranteed)
- Senior citizens — +0.5% across most banks
RD vs SIP — when to choose which
RD guarantees a specific maturity amount — no market risk. SIP is market-linked and historically gives higher returns over 10+ year horizons. Use RD for short-term goals (1-3 years) where capital safety matters. Use SIP for long-term goals (5+ years) where you can absorb volatility for higher returns.
Worked example
Example — ₹5,000/month RD for 5 years at 7.0%:
- Total deposits over 60 months: ₹3,00,000
- With quarterly compounding at 7.0%: Maturity ≈ ₹3,59,000
- Interest earned: ₹59,000
Example — Senior citizen ₹10,000/month RD for 3 years at 7.5%:
- Total deposits over 36 months: ₹3,60,000
- With quarterly compounding at 7.5%: Maturity ≈ ₹4,05,500
- Interest earned: ₹45,500
Frequently asked questions
Is RD interest taxable?
Yes. Interest earned on RD is fully taxable as Income from Other Sources at your slab rate. Banks deduct TDS at 10% if annual interest from all RDs with one bank exceeds ₹40,000 (₹50,000 for senior citizens).
Can I close my RD before maturity?
Yes, most banks allow premature closure after 3 months with a 1% penalty on the interest rate. You get the principal back with interest at the applicable lower rate minus the penalty.
Can I skip a monthly deposit?
Most banks charge ₹1-5 per ₹100 of default as a penalty. Continued defaults (typically 3-6 missed deposits) lead to RD closure. Set up an auto-debit mandate to avoid missing payments.
RD vs FD — which is better?
FD gives slightly higher effective yield because your entire amount earns interest from day one. RD is better if you don't have a lumpsum — you invest gradually from your salary. Both have identical interest rates at the same bank and tenure.
Can I get a loan against my RD?
Yes. Most banks lend up to 80-90% of the RD corpus at an interest rate 1-2% higher than your RD rate. This is useful for short-term liquidity without breaking the deposit.
Does Post Office RD have different rules?
Yes. Post Office RD has a fixed 5-year tenure, quarterly compounding at a government-notified rate (currently 6.7% for Q1 FY26-27), and allows partial withdrawal after 1 year. The rate is reset every quarter but locked for you once you open the account.
Can NRIs open an RD?
NRIs can open NRE RDs (repatriable, tax-free in India) or NRO RDs (partially repatriable, taxable). NRE RD interest rates are typically 0.5% lower than resident RDs and range from 6.5-7.0% for 1-5 year tenures.
How is my effective annualized return different from the headline rate?
Because deposits are spread over the tenure, your effective return (IRR) is always lower than the headline rate. A 5-year RD at 7% has an effective yield around 3.5-4% — half your money earns interest for less than 30 months on average.