Work out the maturity value of a recurring deposit — bank or post office — from your monthly instalment, rate and tenure.
How this RD calculator works
In a recurring deposit you commit a fixed amount every month for a fixed tenure. Each instalment earns interest for the months it remains deposited, so the first instalment works the hardest and the last one barely works at all:
Each month: balance = (balance + instalment) × (1 + r/12)
Banks technically compound RDs quarterly; the monthly accrual above lands within a few rupees of published bank RD tables for typical amounts, which is why we use it.
Worked example
₹5,000 a month at 7% for 5 years: you deposit ₹3,00,000 over 60 instalments, and the RD matures at ₹3,60,053 — interest of ₹60,053. Note that this is noticeably less than ₹3,00,000 parked as a day-one FD at the same rate would earn, because the instalments arrive gradually.
Bank RD vs Post Office RD
The Post Office RD is a 5-year product whose rate is set by the government each quarter alongside other small-savings schemes — check the latest quarterly notification before opening, and enter that rate above. It carries a sovereign guarantee. Bank RDs offer flexible tenures (6 months to 10 years) at card rates that typically range 6.5%–7.5%, with most banks paying senior citizens about 0.5% extra. Bank deposits are insured up to ₹5 lakh per bank under DICGC.
| Rate (% p.a.) | Maturity — ₹5,000/month for 5 years |
|---|
| 6.50% | ₹3,55,284 |
| 7.00% | ₹3,60,053 |
| 7.50% | ₹3,64,902 |
Illustrative rates only — bank and post office rates change; always confirm the current rate before booking.
Tax on RD interest (FY 2025-26)
RD interest is fully taxable at your slab rate, just like FD interest. TDS at 10% applies once your interest across deposits at a bank crosses ₹50,000 in a year (₹1,00,000 for senior citizens). TDS or not, the full interest belongs in your income tax return — check what you owe with our income tax calculator.
Frequently Asked Questions
How is RD interest calculated?
Each monthly instalment earns interest only for the months it stays deposited — your first instalment compounds for the full tenure, the last one for barely a month. Banks compound quarterly; this calculator accrues monthly at r/12, which matches bank RD tables within a few rupees for typical amounts.
What is the post office RD interest rate?
The Post Office RD rate is notified by the government every quarter along with other small-savings rates, so we deliberately do not hardcode it — check the latest quarterly notification (indiapost.gov.in) and type the current rate into the calculator. Bank RD rates typically run 6.5%–7.5% depending on tenure.
Is RD interest taxable? Is there TDS?
Yes — RD interest is added to your income and taxed at your slab rate. Banks deduct 10% TDS when your total interest across deposits crosses ₹50,000 a year (₹1,00,000 for senior citizens, FY 2025-26 limits). You can submit Form 15G/15H if your total income is below the taxable limit.
RD vs FD — which earns more?
For the same rate and period, an FD earns more total interest because the full amount compounds from day one, while RD instalments arrive month by month. An RD is for money you are still saving; an FD is for money you already have. Compare with our
FD calculator.
RD vs SIP — which should I pick?
An RD pays a guaranteed, fixed rate — ideal for short-term goals where the amount must be certain. A SIP into equity funds has historically earned more over long periods but is market-linked and can lose value in any given year. A common split: RD/FD for goals under 3 years, SIP beyond that. Try our
SIP calculator to compare.
What happens if I miss an RD instalment?
The post office charges a small default fee (₹1 per ₹100 per month, as per current PORD rules) and the account can be revived within a limited window; after repeated defaults it becomes discontinued. Banks set their own penalties — usually a small charge or reduced interest. The maturity value also drops because the missed month stops compounding.
Can I close an RD early?
Yes. Post office RDs allow premature closure after 3 years (interest then applies at the post office savings rate, not the RD rate). Banks allow early closure with a penalty, typically 0.5%–1% below the applicable rate — the same treatment as breaking an FD.
Estimates are for information and education only — not financial, tax or investment advice. Verify current rates and rules with official sources.