RD Calculator

About Recurring Deposits

A Recurring Deposit lets you save a fixed amount every month instead of committing a lump sum upfront — a natural fit for building savings from regular income, like a salary. Like an FD, the bank guarantees both your principal and the promised interest rate for the full tenure.

How it works

Each month's deposit starts earning interest from the day it's made, compounding quarterly. Because deposits happen at different times, each one has a different amount of time left to grow — the first month's deposit compounds for the full tenure, the last month's deposit barely compounds at all. The banker's RD formula accounts for this automatically.

How to use this calculator

• Set your monthly deposit amount, the interest rate your bank offers, and the tenure.
• RD tenures typically run from 6 months to 10 years — pick one your bank actually offers.
• Compare the result against a lump-sum FD if you're deciding between saving monthly or investing what you already have.

Strategies worth knowing

• Automate it — set up an auto-debit so the monthly deposit happens without you remembering, which is most of the discipline benefit of an RD.
• Match tenure to the goal — a wedding, a down payment, an annual insurance premium — so the RD matures exactly when you need the money.
• RD vs SIP — an RD gives a fixed, guaranteed return; a SIP into mutual funds is market-linked and historically higher over long horizons, but with real risk of loss. Use an RD for near-term, non-negotiable goals.

Important caveats

• RD interest is fully taxable at your income slab rate — the maturity value shown is pre-tax.
• Missing a monthly instalment usually attracts a small penalty on a real RD — this calculator assumes every instalment is paid on time.
• Most banks compound RDs quarterly, but a few use monthly compounding — confirm your bank's convention if the exact figure matters.

Why the formula looks different from an FD

An FD has one deposit that compounds for the whole tenure — a single exponential term. An RD has many deposits, each compounding for a different remaining duration, so the formula is really a sum of many individual FD-style terms. The banker's RD formula is a closed-form shortcut for that sum, which is why it looks more complex than the FD formula despite being built from the same underlying maths.

Benefits

• Builds a consistent savings habit without needing a lump sum upfront.
• Guaranteed, predictable return — no market risk.
• DICGC insurance up to the current limit, same as any bank deposit.