RD Calculator - Check Your Maturity Amount & Compare RD vs SIP
Calculate your recurring deposit maturity amount instantly. See interest earned, TDS impact, and how your RD compares to a SIP for the same monthly amount – the one comparison no other RD calculator shows.
Have a lump sum instead? Use our FD Calculator →
Year-by-Year Breakdown
| Year | Deposited | Interest Earned | TDS | Balance |
|---|
How Recurring Deposit Interest is Calculated in India
Unlike a fixed deposit where you invest a lump sum once, an RD lets you invest a fixed amount every month and earn guaranteed interest on each instalment. Every Indian bank – whether SBI, HDFC, ICICI or your local co-operative bank – compounds RD interest quarterly, not monthly or annually. This one detail matters more than most people realise.
The RD Formula – Explained Simply
Indian banks use this standard quarterly compounding formula mandated by RBI:
where i = Annual Rate / 400 (quarterly interest rate)
n = Total quarters (months ÷ 3)
R = Monthly deposit amount
The formula looks intimidating but the logic is simple: each monthly instalment earns interest from the day it is deposited until maturity, compounded every quarter. Your first instalment earns interest for the full tenure; your last instalment earns interest for just one month.
Step-by-Step Example: ₹10,000/month for 2 years at 7%
| Input | Value | Calculation |
|---|---|---|
| Monthly deposit (R) | ₹10,000 | – |
| Annual interest rate | 7.00% | – |
| Quarterly rate (i) | 1.75% | 7 ÷ 400 = 0.0175 |
| Tenure in months | 24 months | – |
| Quarters (n) | 8 | 24 ÷ 3 = 8 |
| Total invested | ₹2,40,000 | 10,000 × 24 |
| Maturity amount | ₹2,57,690 | Using formula above |
| Interest earned | ₹17,690 | Maturity − Invested |
Why Quarterly Compounding Matters
On a ₹5,000/month RD at 7% for 5 years, quarterly compounding gives you approximately ₹3,60,590 at maturity – versus ₹3,57,000 with simple annual interest. The difference is ₹3,590 of extra interest purely from compounding frequency. Over 10 years at higher deposit amounts, this gap grows to tens of thousands of rupees.
Bank-wise RD Interest Rates (FY 2025–26)
Interest rates vary by bank, tenure slab, and depositor category. Senior citizens always get an additional 0.25–0.75% over the general rate.
| Bank / Institution | General Rate (p.a.) | Senior Citizen Rate | Min. Monthly Deposit | Max Tenure | Premature Penalty |
|---|---|---|---|---|---|
| SBI | 6.50–7.10% | 7.00–7.60% | ₹100 | 10 years | 0.50% |
| Post Office (NSRD) | 6.70% | N/A (Govt. scheme) | ₹100 | 5 years (extendable) | Not allowed <3 yr |
| HDFC Bank | 6.50–7.25% | 7.00–7.75% | ₹500 | 10 years | 1.00% |
| ICICI Bank | 6.70–7.25% | 7.20–7.75% | ₹500 | 10 years | 1.00% |
| Kotak Mahindra Bank | 6.50–7.40% | 7.00–7.90% | ₹500 | 10 years | 1.00% |
| Axis Bank | 6.75–7.20% | 7.25–7.70% | ₹500 | 10 years | 1.00% |
| Bank of Baroda | 6.50–7.15% | 7.00–7.65% | ₹100 | 10 years | 0.50% |
*Rates are indicative for FY 2025–26 and vary by tenure slab. Always verify current rates directly with your bank before opening an account.
Special RD Variants You Should Know
Flexi RD: Some banks like SBI and Canara Bank offer flexible RDs where you can vary your monthly deposit between a minimum and maximum amount. Useful if your income is irregular. Interest is calculated on each instalment separately.
Step-Up RD: Your monthly deposit increases by a fixed amount each year. Ideal for salaried employees expecting annual salary hikes. A ₹5,000/month RD stepping up by ₹1,000/year builds significantly more corpus than a flat RD.
Tax-Saving RD: Post Office offers a 5-year RD where deposits qualify for Section 80C deduction up to ₹1.5 lakh per year under the old tax regime. This is one of the few RD variants with a tax benefit.
RD vs SIP vs FD — Which is Right for You?
Most financial guides compare RD with only one alternative. Here is a complete three-way comparison – RD vs SIP vs FD – covering returns, risk, taxation, and liquidity. The right choice depends entirely on your goal tenure and risk tolerance.
Complete Comparison: ₹5,000/month for Different Tenures
| Option | 3 Years | 5 Years | 10 Years | Risk | Tax on Returns |
|---|---|---|---|---|---|
| RD at 7% | ₹2,00,650 | ₹3,60,590 | ₹8,67,220 | Zero | Slab rate (full interest) |
| FD (lump sum equiv.) | ₹1,96,800 | ₹3,53,000 | ₹8,45,000 | Zero | Slab rate (full interest) |
| SIP at 12% (equity) | ₹2,16,000 | ₹4,12,000 | ₹11,62,000 | Market risk | LTCG 12.5% (above ₹1.25L) |
| PPF (15yr lock-in) | – | – | ₹10,65,000 | Sovereign | Tax-free (EEE) |
*SIP figures are projections at 12% CAGR – actual returns vary. RD and FD figures are calculated at stated rates. PPF at current 7.1% p.a.
The Decision Framework
Choose RD if: Your goal is 1–5 years away, you need guaranteed returns with no market risk, you want disciplined monthly saving with a fixed maturity date (wedding, car down payment, vacation, emergency fund top-up).
Choose SIP if: Your goal is 5+ years away, you can tolerate short-term market swings, you want to build long-term wealth significantly above inflation. The tax efficiency of LTCG (12.5% vs slab rate) also tilts the balance toward SIP for higher income brackets. Use our SIP Calculator to model your exact scenario.
Choose PPF if: You want completely tax-free returns (EEE status – exempt on investment, interest, and maturity) and can commit for 15 years. PPF at 7.1% tax-free beats RD at 7% taxable for anyone in the 20%+ tax bracket. Use our PPF Calculator to compare.
RD + SIP split: The smartest approach for a salaried investor with multiple goals – RD for near-term goals (1–3 years), SIP for long-term wealth (5+ years). They are not mutually exclusive. Use our Investment Planning Calculator to allocate your monthly savings across both.
RD vs SIP — The Honest Answer
| Factor | RD | SIP (Equity) |
|---|---|---|
| Returns | Fixed, guaranteed | Variable, market-linked |
| Capital safety | 100% guaranteed (DICGC up to ₹5L) | No guarantee, NAV fluctuates |
| Expected return (10yr) | 6.5–7.5% | 10–14% historical |
| Inflation beating | Marginal (barely beats 6% inflation) | Strong (beats inflation by 4–8%) |
| Taxation | Full interest taxable at slab rate | Only gains above ₹1.25L taxed at 12.5% |
| Liquidity | Moderate (penalty on premature exit) | High (exit anytime, no penalty after 1yr) |
| Ideal tenure | 1–5 years | 5+ years |
TDS on RD Interest — What You Actually Take Home
This is the part most RD calculators ignore entirely. If your total interest across all deposits with one bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), TDS at 10% is automatically deducted by the bank – before you even see the money. On a ₹10,000/month RD at 7% for 5 years, annual interest crosses ₹40,000 from approximately year 3 onwards. The toggle above shows you exactly when TDS kicks in for your specific deposit.
How to avoid TDS legally: Submit Form 15G at the start of each financial year if you are below 60 and your total annual income is below the basic exemption limit (₹2.5 lakh under old regime, ₹3 lakh under new regime). Senior citizens submit Form 15H if total income is below ₹5 lakh. Note: TDS avoidance via Form 15G/15H does not mean the interest is tax-free – it is still taxable and must be declared in your ITR. Use our Income Tax Calculator to check your slab.
Important: TDS is deducted on accrual basis – meaning as interest accrues each year, not just at maturity. If you have RDs across multiple banks, each bank applies the ₹40,000 threshold independently. Splitting deposits across banks is a legal way to stay below the TDS threshold at each institution.
Smart RD Strategies Most Indians Miss
Opening an RD is easy. Using it intelligently is what separates disciplined savers from people who end up breaking their RD prematurely or paying unnecessary tax. These are the strategies that actually move the needle.
1. The RD Ladder Strategy
Instead of one large RD, open multiple smaller RDs with staggered maturity dates – 6 months, 12 months, 18 months, 24 months. Each RD matures at a different time, giving you periodic access to funds without breaking any single deposit. This is the RD equivalent of an FD ladder.
Example: Instead of ₹20,000/month in one RD for 2 years, open four RDs of ₹5,000/month each – maturing at 6, 12, 18, and 24 months. You get liquidity every 6 months without premature withdrawal penalties. The interest sacrifice is minimal, the flexibility gain is significant.
2. RD for Goal-Based Savings
RD works best when tied to a specific goal with a fixed date. Calculate your target amount, work backwards using this calculator, and open the RD the day you decide on the goal. Common goal-based RD use cases:
- Emergency fund build-up: ₹5,000/month RD for 12 months = ₹62,000+ with interest. Safe, liquid at maturity, no market risk.
- Annual premium payment: Open an RD that matures 1 week before your insurance premium due date every year.
- Vacation fund: Start an RD 12–18 months before a planned trip. The fixed maturity keeps you from spending the money early.
- Down payment saving: For a home or car 2–3 years away, RD gives you guaranteed corpus growth with a precise maturity amount to plan around.
3. Senior Citizen RD — The Hidden 0.50% Advantage
Senior citizens (60+) get 0.25–0.75% additional interest on RDs across most banks. On a ₹1,00,000/year RD commitment for 5 years, even a 0.50% higher rate means approximately ₹8,500–9,000 extra at maturity. The TDS threshold is also higher at ₹50,000/year vs ₹40,000 for general customers. If you are a senior citizen, always toggle the switch in the calculator above to see your personalised rate.
4. RD Interest Tax Planning
RD interest is added to your total income and taxed at your slab rate. For someone in the 30% tax bracket, a 7% RD has an effective post-tax yield of only 4.9% – barely above long-term inflation. At this point, debt mutual funds (taxed at slab rate but with more flexibility) or PPF (tax-free at 7.1%) may be significantly better. Compare the real yields:
| Tax Slab | RD at 7% – Post-Tax Yield | PPF at 7.1% – Post-Tax Yield | Verdict |
|---|---|---|---|
| 0% (no tax) | 7.00% | 7.10% | PPF marginally better |
| 5% | 6.65% | 7.10% | PPF better |
| 20% | 5.60% | 7.10% | PPF clearly better |
| 30% | 4.90% | 7.10% | PPF far better |
For investors in the 20%+ tax bracket, RD is often not the most tax-efficient instrument unless it is the only option at your bank or your goal tenure is under 1 year. Compare alternatives using our PPF Calculator and FD Calculator before committing.
5. Premature Withdrawal — The Real Cost
Most banks charge a 0.50–1.00% penalty on the applicable rate if you break an RD before maturity. But the bigger hidden cost is compound interest lost. An RD broken at month 18 of a 36-month tenure loses not just 18 months of future interest but also the compounding that would have applied to it. Always calculate the exact break-even before deciding to close an RD early – often a personal loan at 10–11% for 2–3 months is cheaper than breaking a 7% RD with penalty.
Frequently Asked Questions
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