Recurring Deposits (RD) Calculator

Calculate your maturity amount, total investment, and interest earned

Calculator

₹
%
6 mo 3 yrs 5 yrs 10 yrs

Results

Maturity Amount

₹0

Total Investment

₹0

Interest Earned

₹0

How to Use the RD Calculator

1

Enter Monthly Deposit Amount

Input the amount you plan to deposit every month in the RD account.

2

Set Interest Rate

Enter the annual interest rate offered by your bank for RD accounts.

3

Select Tenure

Choose the investment duration in months using the slider or enter it directly.

4

Choose Compounding Frequency

Select how frequently the interest is compounded. Quarterly compounding is most common for RDs.

5

Calculate Results

Click the "Calculate" button to see your maturity amount, total investment, and interest earned.

6

Analyze Chart

Review the visual chart that shows the growth of your investment over time.

About Recurring Deposits (RD)

What is a Recurring Deposit?

A Recurring Deposit (RD) is a type of term deposit offered by banks where you deposit a fixed amount every month for a specific period. At the end of this period, you receive the total amount deposited plus the interest earned.

Key Features

  • Regular monthly contributions of a fixed amount
  • Fixed tenure (typically 6 months to 10 years)
  • Fixed interest rate for the entire tenure
  • Interest is typically compounded quarterly
  • Ideal for disciplined monthly savings
  • Lower minimum deposit requirement compared to Fixed Deposits

Benefits

  • Encourages regular savings habit
  • Better returns than regular savings accounts
  • Flexible tenure options
  • Lower risk investment option
  • Option to take loans against RD in many banks
  • Tax benefits in some countries (subject to local tax laws)

Considerations

  • Penalties for missed monthly installments
  • Premature withdrawal usually results in lower interest rates
  • Interest earned is typically taxable
  • The interest rate remains fixed even if market rates increase
  • Returns may not beat inflation in the long term

RD Calculation Formula Explained

Standard Formula

M = R × [ (1 + i)^n - 1 ] × (1 + i) / i

Where:

  • M = Maturity value
  • R = Monthly deposit amount
  • i = Interest rate per period (as a decimal)
  • n = Number of periods

Interest Rate Calculation

Based on compounding frequency:

For quarterly compounding: i = annual_rate / (4 × 100)
For monthly compounding: i = annual_rate / (12 × 100)
For half-yearly compounding: i = annual_rate / (2 × 100)
For yearly compounding: i = annual_rate / 100

The number of periods (n) is calculated as: n = tenure_in_months × compounding_periods_per_month

Example Calculation

For a monthly deposit of ₹5,000, interest rate of 7.5% p.a., tenure of 24 months with quarterly compounding:

i = 7.5% / (4 × 100) = 0.01875 (quarterly rate)
n = 24 × (4/12) = 8 quarters

M = 5000 × [(1 + 0.01875)^8 - 1] × (1 + 0.01875) / 0.01875
M = 5000 × [1.15987 - 1] × 1.01875 / 0.01875
M = 5000 × 0.15987 × 54.333
M = 5000 × 8.6859
M = 43,430 (approximately)

Tips for Using Recurring Deposits

Planning & Selection

  • Compare RD interest rates across different banks
  • Choose a tenure that aligns with your financial goals
  • Set up auto-debit to avoid missing monthly payments
  • Consider laddering multiple RDs with different maturity dates
  • Check if your bank offers special rates for seniors or existing customers

Maximizing Returns

  • Start early to benefit from compound interest
  • Invest consistently every month without fail
  • Consider reinvesting your matured RD for continued growth
  • Lock in higher interest rates when they are available
  • Keep track of maturity dates to plan reinvestment

Tax Planning

  • Remember that interest earned is typically taxable
  • Consider Tax-Saver FDs if you're looking for tax benefits
  • Plan your RD maturity to coincide with tax-optimal periods
  • Keep track of interest earned for income tax filing
  • Consult a tax advisor to optimize your investment strategy

Managing Your RD

  • Maintain sufficient balance in your linked account
  • Avoid premature withdrawals to get maximum returns
  • Consider the penalty structure before opening an RD
  • Keep your nomination details updated
  • Review and recalculate your RD strategy annually

Monthly Deposit & Growth Schedule

Month Deposit Amount Interest Earned Balance
Calculate to see monthly details
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