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RD Calculator

Recurring deposit maturity, interest and post-tax (India)

By UtilityKit Team · Reviewed for accuracy by UtilityKit Editors · Updated May 2026

About RD Calculator

A Recurring Deposit (RD) is the disciplined-savings cousin of a Fixed Deposit: instead of locking a single lump sum, you commit to a fixed monthly deposit for a chosen tenure, and the bank or India Post compounds interest quarterly on each instalment from its deposit date until the RD matures. This calculator implements that math instalment-by-instalment, which means it produces the exact maturity figure your bank's RD passbook will show — not a smoothed approximation. Inputs are minimal: the monthly deposit, the annual interest rate, the tenure in months, your tax slab and the compounding frequency (defaults to quarterly, the universal Indian standard).

Why use RD Calculator

Instalment-by-Instalment Math

The tool computes interest on each monthly contribution separately at quarterly compounding, summing them into the maturity amount. This matches every Indian bank's RD passbook to the rupee, where simpler 'annuity formulas' diverge by ₹50–₹500 over a 5-year RD.

Quarterly Compounding by Default

SBI, HDFC, ICICI, Axis, Canara and India Post all compound RD interest once a quarter. The default reflects this; switching to monthly compounding is rare and only used by a handful of cooperative banks for marketing.

Post-Tax Reality

RD interest is fully taxable as Income from Other Sources at your slab — there is no §80C benefit and no special exemption like NSC. The post-tax cards make the real return visible at any slab from 0% to 30%.

TDS Awareness in the Notes

The §194A threshold of ₹40,000 (₹50,000 for senior citizens) applies to RD interest aggregated across all FDs and RDs at one bank. The notes remind you of this so a TDS deduction on your account does not surprise you mid-year.

Premature-Closure Caveat

Most banks levy a 0.5%–1% rate penalty if you break an RD early, and some pay zero interest if closed within 6 months. The notes flag this so the maturity number is not mistaken for a guaranteed exit value.

Browser-Only Privacy

Monthly deposit amounts, slab rate and other inputs are personal financial data. The calculator runs entirely in your browser; no input is transmitted, logged or analytics-tagged.

How to use RD Calculator

Enter the monthly deposit you plan to commit, in rupees — most banks have a ₹100 minimum, in multiples of ₹10 or ₹100
Enter the annual interest rate the bank or India Post is offering for your chosen tenure, for example 6.7 for 6.70% p.a.
Enter the tenure in months — Indian RDs typically run from 6 months to 10 years, in 3-month multiples
Confirm the compounding frequency — Quarterly is standard; switch to Monthly only if the deposit terms explicitly say so
Choose your tax slab to see the post-tax interest, since RD interest is fully taxable at your slab
Read the maturity amount, total deposited and interest earned, plus the post-tax view in the second card row
Use the notes section as a checklist — confirm TDS, premature-closure rules and tax declaration before booking

When to use RD Calculator

Before opening a Recurring Deposit at a bank or India Post to confirm the maturity amount on the deposit advice
When planning a saving sleeve for a foreseeable goal — child's school admission, annual insurance premium, festival expenses
When deciding between an RD, a debt fund SIP, or a Tax-Saving FD as your monthly fixed-income contribution
When sanity-checking a bank RD passbook entry against the expected balance after a few months of deposits
When choosing the optimal tenure — most banks publish best rates at 12 or 24 months, not at the longest tenure
When estimating the post-tax effective yield to compare against a low-cost debt index fund or a savings account sweep-in

Examples

Salaried saver, 5-year RD at SBI rate

Input: Monthly: ₹5,000, Rate: 6.70% p.a., Tenure: 60 months, Compounding: quarterly, Slab: 30%

Output: Maturity ≈ ₹3,57,287 — Total deposited ₹3,00,000 — Interest ₹57,287 — Post-tax interest ₹40,101

Short 1-year RD

Input: Monthly: ₹10,000, Rate: 6.50% p.a., Tenure: 12 months, Compounding: quarterly, Slab: 20%

Output: Maturity ≈ ₹1,24,224 — Total deposited ₹1,20,000 — Interest ₹4,224 — Post-tax interest ₹3,379

Senior citizen 3-year RD

Input: Monthly: ₹15,000, Rate: 7.20% p.a., Tenure: 36 months, Compounding: quarterly, Slab: 5%

Output: Maturity ≈ ₹6,01,672 — Total deposited ₹5,40,000 — Interest ₹61,672 — Post-tax interest ₹58,588

Tips

Always pick the tenure where the bank has its best interest rate — banks frequently publish a 'special tenure' (e.g., 444 days, 27 months) that pays more than the rates around it
Set up a standing instruction from your salary account on a fixed date each month so the RD never misses an instalment penalty
Submit Form 15G (under-60) or Form 15H (senior, total income below basic exemption) at the start of the financial year to skip TDS on RD + FD aggregate interest
RD interest is fully taxable; if you are in the 30% slab, the post-tax effective yield from a 6.7% RD is only about 4.65%. Compare this against a 5-year tax-free PPF for the same disciplined-savings goal
Avoid premature closure unless absolutely necessary — the 0.5–1% penalty plus the loss of compounding rarely offsets the benefit of early access; an emergency fund in a savings account or sweep-in is a better tool for short-notice withdrawals
Cooperative bank RDs sometimes pay 0.5–1% above the big-bank rate, but check DICGC ₹5 lakh insurance coverage and the bank's regulatory filings before parking large sums

Frequently Asked Questions

Is RD interest taxable?▾

Yes. Interest earned on a Recurring Deposit is fully taxable at your applicable slab rate as Income from Other Sources. There is no exemption like §80C, no concessional rate, and no annual exclusion. You must declare the accrued interest in your ITR every year — even though banks pay the entire interest only at maturity, accrual-basis taxpayers should include the year's accrued interest.

What is the TDS threshold on RD interest?▾

Under Section 194A, banks deduct 10% TDS once your aggregate annual interest from RDs and FDs at the same bank crosses ₹40,000 (₹50,000 for Resident Senior Citizens) in a financial year. If your PAN is not on record, TDS is deducted at 20%. India Post deducts TDS on the same threshold from FY 2020-21 onwards. Submit Form 15G or 15H if your total income falls below the basic exemption.

What is the premature-closure penalty on an RD?▾

Most banks charge a penalty of 0.50% to 1.00% on the applicable card rate when an RD is closed before maturity. The interest is recalculated at the rate that would have applied for the actual period the RD ran, minus the penalty. Some banks pay zero interest if the RD is closed within the first 6 months. India Post Office RDs allow premature closure only after 3 years and at the savings account interest rate.

How is RD interest calculated by Indian banks?▾

Each monthly instalment is treated as a separate deposit that earns interest at r/4 every quarter from its deposit date until maturity. The maturity is the sum of (instalment × (1 + r/4)^(quarters_remaining)) for every instalment over the tenure. This is called 'instalment-by-instalment quarterly compounding' and is the formula used in every Indian bank's core banking system.

Can I miss an RD instalment?▾

Most banks allow missed instalments but levy a small penalty — typically ₹1.50 to ₹2 per ₹100 of monthly deposit per missed instalment. After six consecutive missed instalments, banks usually close the RD as a matured deposit at savings-rate interest, which reduces the effective return substantially. India Post is stricter — RDs can be discontinued and revived only with the missed amount plus default fee.

Which is better — RD or SIP in a debt mutual fund?▾

An RD offers a guaranteed sovereign or bank-guaranteed return at quarterly compounding, taxed at your slab rate. A debt mutual fund SIP fluctuates with bond yields, typically returns 6.5%–8% over rolling 3-year periods, and is now (post-April 2023) also taxed at slab rate with no indexation benefit. For investors below the 30% slab the RD usually wins on simplicity and zero credit risk; above the 30% slab a debt fund's potential capital appreciation can compensate, especially for a 5+ year horizon.

Is the India Post Office RD the same as a bank RD?▾

Functionally yes, with three differences. (1) The Post Office RD has a fixed 5-year tenure (60 months) and runs at the rate notified each quarter by the Ministry of Finance — currently 6.7%. (2) It compounds quarterly, like bank RDs, with the same instalment-by-instalment math. (3) Premature closure is allowed only after 3 years and pays the savings-rate interest. Post Office RD interest is taxable in the same way as a bank RD.

Does RD qualify for any tax deduction?▾

No. Unlike a Tax-Saving 5-year FD that qualifies for §80C up to ₹1.5 lakh, an ordinary Recurring Deposit does not qualify for any tax deduction. Both the deposit and the maturity proceeds are post-tax money in the depositor's hands; only the interest earned is additional taxable income. If you want a tax-saving variant of disciplined monthly savings, consider a PPF SIP-style monthly contribution or an ELSS SIP.

Explore the category

Glossary

Recurring Deposit (RD): A bank or post-office savings product where the depositor commits a fixed monthly contribution for a fixed tenure, and the institution pays interest compounded quarterly. Maturity equals the sum of contributions plus accumulated interest.
Instalment-by-instalment Compounding: The method by which RDs are computed in India: each monthly contribution is treated as a separate principal that earns quarterly compounded interest from its deposit date until maturity. Maturity = sum over each instalment of (contribution × (1 + r/4)^(quarters_remaining)).
Compounding Frequency (n): How many times per year interest is added to the balance. Indian RDs use n = 4 (quarterly) by default; some products quote n = 12 (monthly). Higher n yields a slightly higher effective annualised return.
Section 194A: The Income Tax Act provision requiring banks and India Post to deduct 10% TDS on aggregate annual interest from RDs and FDs at the same depositor-institution combination, once the threshold is breached. Threshold is ₹40,000 (₹50,000 for senior citizens); rate becomes 20% if PAN is not submitted.
DICGC Insurance: Deposit Insurance and Credit Guarantee Corporation insures bank deposits — including RDs — up to ₹5 lakh per depositor per bank in India. RDs at cooperative or small banks should be sized with this limit in mind for safety.
Form 15G / 15H: Self-declarations submitted to a bank or India Post by depositors whose total income is below the basic exemption limit, requesting non-deduction of TDS on RD/FD interest. 15G is for non-seniors, 15H for senior citizens. Must be submitted every financial year.
Premature Closure Penalty: A reduction in the applicable interest rate — typically 0.5% to 1% — applied if an RD is closed before the original maturity date. Some banks pay no interest at all if the RD is closed within the first 6 months.