Reviewed October 2026
How the RD calculator works
A recurring deposit (RD) lets you save a fixed amount every month at a fixed interest rate. Banks and India Post compound RD interest quarterly, and each instalment earns interest only for the months it stays in the account.
RD formula
M = Σ R × (1 + r/4)^(k/3) for k = 1 … n R = monthly instalment r = annual interest rate k = months each instalment stays invested n = tenure in months
This is equivalent to the formula banks publish, M = R × [(1 + i)^n − 1] ÷ [1 − (1 + i)^(−1/3)] with i = r/4 and n in quarters.
Worked example
₹5,000 a month for 3 years at 7% matures at about ₹2,00,686 on ₹1,80,000 deposited.
A 5-year post office RD at 6.7% (October–December 2026 rate) turns ₹100 a month into about ₹7,136.
Frequently asked questions
Is RD interest taxable?
Yes, at your slab rate. Banks deduct TDS on RD interest above ₹50,000 a year (₹1,00,000 for senior citizens).
RD or SIP — which is better?
RD gives a guaranteed return and suits short goals (1–3 years). For goals 5+ years away, an equity SIP has historically beaten RD returns after inflation, but with ups and downs.
What happens if I miss an RD instalment?
Banks usually charge a small penalty per missed instalment, and several missed instalments can close the account. Check your bank's terms.