Recurring Deposit Calculator — RD Returns

Monthly Deposit

₹

₹500₹5,00,000

Interest Rate

% p.a.

115

Tenure

months

3120

Compounding

Maturity Amount

₹0

Total Deposited

₹0

Interest Earned

₹0

Effective Yield

0.00%

Corpus Breakdown

Deposited vs. interest earned

Total Deposited

₹0

Interest Earned

₹0

Maturity Amount

₹0

What is a RD?

A Recurring Deposit Calculator is a financial tool that computes the maturity amount, interest earned, and effective yield for a fixed monthly savings plan held with a bank or post office. By entering your monthly deposit amount, the annual interest rate offered by your bank, the tenure in months, and the compounding frequency, you get an instant and accurate projection of exactly how much you will receive at the end of your RD.

A Recurring Deposit (RD) is one of the most popular savings instruments in India, used by millions of salaried individuals, homemakers, and retirees to build a corpus from regular monthly income. Unlike a SIP Calculator that models market-linked mutual fund returns, an RD Calculator deals with fully guaranteed, risk-free returns — the maturity amount you see is the amount the bank is contractually obligated to pay.

The calculation is more nuanced than it appears. Each monthly instalment you deposit earns compound interest only for the time it remains in the account — so your first deposit compounds for the full tenure, while your last deposit earns interest for just one month. The calculator accurately handles this staggered compounding using the standard RD formula:

Maturity = Σ P × (1 + r/n)^(n × t_k)

where each instalment P earns compound interest at rate r, compounded n times per year, for its remaining holding period t_k. Most Indian banks — including SBI, HDFC, ICICI, and Axis — compound RD interest quarterly (n = 4), though some offer monthly compounding.

Understanding the difference between your stated interest rate and your effective yield is also important. Because early instalments compound longer than later ones, your effective annualised return on total capital deployed is somewhat higher than the contracted rate. This calculator surfaces that number explicitly, so you can make apples-to-apples comparisons between an RD at 7.5% p.a. and alternative instruments like a Simple Interest Calculator product at a similar rate.

How to use this RD calculator

Enter your Monthly Deposit — the fixed amount you will deposit each month. Use the slider for quick exploration, or type an exact value. Most salaried investors start between ₹1,000 and ₹10,000 per month.
Set the Interest Rate — enter the annual interest rate (% p.a.) your bank is offering for your chosen tenure. Current SBI RD rates range from 6.5% to 7.1% p.a. for general customers; HDFC and ICICI typically offer 7.0–7.5% p.a. for tenures of 1–2 years. Senior citizens should add the applicable premium (usually +0.25–0.75%).
Choose the Tenure — enter the number of months for your RD. Bank RDs range from 3 months to 10 years. Common choices are 12 months (1 year), 24 months (2 years), and 60 months (5 years). Longer tenures lock in the current rate and benefit more from compounding.
Select Compounding Frequency — choose Quarterly (the default for most Indian banks), Monthly, or Annually. If you are unsure, leave it at Quarterly — it matches SBI, HDFC, ICICI, and most other major banks.
Read the results — your Maturity Amount, Total Deposited, Interest Earned, and Effective Yield update instantly. Review the Corpus Breakdown for the invested-vs-interest split, and check the Rate Sensitivity card to see how a 1% difference in rate affects your final number.
Use Reverse Mode for goal-based planning — click "Reverse" and enter a target maturity amount (e.g. ₹1,00,000). Keep rate, tenure, and compounding fixed, and the calculator shows you the exact Monthly Deposit you need to hit that goal.
Scroll down to the Month-by-Month Schedule — this table shows your running balance, cumulative deposits, and interest accrued for every month of the tenure. Useful for tracking your RD progress and for declaring the correct interest amount in your ITR each financial year.

Formula & Methodology

The standard RD maturity formula treats each monthly instalment as an independent deposit earning compound interest for its remaining tenure:

Maturity Amount = Σₖ₌₁ⁿ P × (1 + r/f)^(f × (n − k + 1) / 12)

Variables:
- P — Monthly deposit amount (₹)
- r — Annual interest rate (as a decimal, e.g. 0.071 for 7.1%)
- f — Compounding frequency per year (4 for quarterly, 12 for monthly, 1 for annual)
- n — Total tenure in months
- k — Month index of each instalment (1 = first month, n = last month)
- (n − k + 1) — Months remaining from the k-th instalment to maturity

Effective Monthly Rate (used in the growth chart):
r_monthly = (1 + r/f)^(f/12) − 1

Worked Example:
Monthly deposit P = ₹5,000 | Rate r = 7.1% p.a. | Tenure = 24 months | Compounding = Quarterly (f = 4)

- Instalment 1 compounds for 24 months: ₹5,000 × (1 + 0.071/4)^(4 × 24/12) = ₹5,000 × (1.01775)^8 ≈ ₹5,758
- Instalment 2 compounds for 23 months: ₹5,000 × (1.01775)^(4 × 23/12) ≈ ₹5,656
- … and so on down to Instalment 24, which earns 1 month of interest: ₹5,000 × (1.01775)^(4/12) ≈ ₹5,029
- Total Maturity ≈ ₹1,29,800 | Total Deposited = ₹1,20,000 | Interest Earned ≈ ₹9,800

Assumptions this calculator makes:
- Interest is credited/compounded at the selected frequency throughout the tenure (not only at maturity, as some older banks practice)
- No premature withdrawal penalty is applied — the full contracted rate is used
- The monthly deposit is made at the beginning of each month
- No TDS deduction is reflected in the maturity amount — your actual credit may be lower if TDS applies; see our TDS Calculator for the deduction estimate

Frequently Asked Questions

What is a Recurring Deposit (RD) and how does it work?

A Recurring Deposit (RD) is a term deposit offered by Indian banks and post offices where you deposit a fixed amount every month for a chosen tenure. At the end of the tenure, the bank returns your total deposited amount plus compound interest calculated at the agreed rate. Unlike a Fixed Deposit where you invest a lump sum, an RD lets you build savings month by month, making it ideal for salaried individuals with a regular income.

What is the formula used to calculate RD maturity amount?

The RD maturity amount is calculated by treating each monthly instalment as a separate fixed deposit that earns compound interest for its remaining tenure. The formula is: Maturity = Σ P × (1 + r/n)^(n × t_k), where P is the monthly deposit, r is the annual interest rate, n is the compounding frequency per year, and t_k is the time remaining for the k-th instalment in years. This means the first instalment earns interest for the full tenure while the last instalment earns interest for just one month. Most Indian banks compound RD interest quarterly.

What is the difference between an RD and a SIP?

A Recurring Deposit (RD) is a fixed-income instrument offered by banks where returns are guaranteed at a pre-agreed interest rate — typically 6–8% p.a. in India today. A Systematic Investment Plan (SIP) invests your monthly contribution into mutual funds, where returns are market-linked and can range from negative to 15–20% p.a. over long periods depending on market conditions. RDs are best for short-term goals and capital preservation, while SIPs are suited for long-term wealth creation where you can tolerate some volatility. Use our [SIP Calculator](/sip-calculator/) to compare potential SIP returns against your RD maturity.

How is RD interest taxed in India?

Interest earned on a Recurring Deposit is fully taxable in India as 'Income from Other Sources' and is added to your gross income for the financial year in which it accrues. If your total interest income from RDs and FDs with a single bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), the bank deducts TDS at 10%. You must declare RD interest in your Income Tax Return (ITR) every year, even if TDS has not been deducted. Use our [TDS Calculator](/tds-calculator/) to check how much TDS applies to your RD interest.

What is the minimum deposit for an RD in India?

Most public sector banks in India allow RD accounts with a minimum monthly deposit of ₹100, while private banks typically start at ₹500 or ₹1,000. Post Office Recurring Deposits (PORD) require a minimum of ₹100 per month with no upper limit. The minimum tenure for a bank RD is generally 3 months, while the Post Office RD has a fixed 5-year tenure. Always confirm the exact minimum with your specific bank before opening an account.

What is the difference between an RD and a Fixed Deposit?

The key difference is in how you invest: an FD requires a one-time lump sum deposit, while an RD accepts a fixed amount every month. FDs are better if you have a large sum available immediately and want the highest guaranteed return, since lump-sum compounding is more efficient. RDs are better for building savings from monthly income — they function as a disciplined savings habit rather than an investment of existing wealth. Use our [Compound Interest Calculator](/compound-interest-calculator/) to model how a lump sum FD would grow over the same period.

How does compounding frequency affect RD returns?

Quarterly compounding is the standard for most Indian bank RDs, meaning interest is calculated and added to the principal four times a year. Monthly compounding gives slightly higher returns because interest starts earning interest more frequently, while annual compounding yields the least. For example, on a ₹5,000/month RD at 7% p.a. for 2 years, quarterly compounding gives approximately ₹1,280 more in interest than annual compounding. Our Recurring Deposit Calculator lets you switch between quarterly, monthly, and annual compounding to compare the difference.

Can I withdraw an RD before maturity?

Yes, most banks allow premature withdrawal of an RD, but they typically impose a penalty of 0.5% to 2% reduction in the applicable interest rate. Some banks may not pay any interest if the RD is closed before the minimum lock-in period (usually 3 months). Post Office RDs can be prematurely closed after 3 years with a reduced interest rate. It is generally advisable to continue the RD until maturity to earn the full contracted interest.

What is the effective yield shown by the RD Calculator?

The Effective Yield (or Effective Annual Yield) represents the annualised return on your total invested capital, taking into account the staggered nature of RD deposits. Because early instalments compound for longer than later ones, the effective yield is almost always higher than the stated interest rate. For instance, a 7.5% p.a. RD compounded quarterly may have an effective yield closer to 7.8–8% depending on tenure. It is a more accurate measure of your actual earnings per rupee invested.

How do I use the Recurring Deposit Calculator in reverse mode?

The reverse mode answers the question: 'I want a maturity amount of ₹X — how much should I deposit each month?' Toggle to Reverse Mode on the calculator, enter your target maturity amount, set the Interest Rate, Tenure, and Compounding frequency, and the calculator will compute the required Monthly Deposit. This is useful when you have a specific financial goal — such as accumulating ₹1 lakh for a family trip or ₹5 lakh for a down payment — and want to work backwards to a savings plan.

Is RD a good investment for short-term goals in India?

RDs are among the best instruments for short-term, goal-oriented savings in India, particularly for tenures of 6 months to 3 years. They offer guaranteed, risk-free returns that are higher than a regular savings account, with the added discipline of monthly contributions. For goals like building an emergency fund, saving for a vacation, or a down payment, an RD is a reliable choice. However, for goals beyond 5 years, inflation can significantly erode real returns — use our [Inflation Calculator](/inflation-calculator/) to check if your RD maturity will retain its purchasing power.

How does the Rate Sensitivity feature in this calculator work?

The Rate Sensitivity card shows your maturity amount and interest earned at five different interest rates: your chosen rate, plus and minus 1% and 2%. This helps you understand how sensitive your RD outcome is to rate changes — useful when comparing offers from different banks or when rates are expected to change. A 1% rate difference on a ₹10,000/month RD over 5 years can mean a difference of ₹15,000–₹25,000 in total interest, which makes the comparison highly actionable.