What is a RD Calculator?
A recurring deposit is a fixed deposit you pay into monthly. That makes the maturity figure harder to guess, because the first instalment earns interest for the whole tenure and the last earns it for a month.
Enter the monthly amount, the rate and the number of months and the tool returns the maturity value, the interest earned and the total deposited.
This computes each instalment separately and adds them up rather than applying a closed-form shortcut, because the per-instalment view is what actually explains the number. It is also why the interest on an RD is always well below what the same total in an FD would earn: on average, the money has been invested for about half the tenure.
Frequently asked questions
Why is RD interest lower than FD interest at the same rate?
Because the money is not all there for the whole term. In an FD the full amount earns for the entire tenure. In an RD the last instalment earns for one month, so on average your money is invested for roughly half the tenure.
How is RD interest compounded?
Quarterly, at most Indian banks, which is what this tool assumes. Each instalment compounds from the month it is paid until maturity.
Is RD interest taxable?
Yes, at your slab rate, and TDS applies once the interest for the year crosses the threshold. It is treated the same way as fixed deposit interest.
What if I miss an instalment?
Banks usually charge a small penalty and the maturity figure drops, because that month’s money never earned anything. This calculator assumes every instalment is paid on time.