ReckonBoxHow the RD calculator works
A recurring deposit is a savings account where you pay a fixed amount every month for a fixed term, and the balance compounds quarterly until it matures. This calculator takes your monthly deposit, the rate and the tenure, then shows the maturity value, how much of it is your own money against interest, the interest left after TDS, and what the same total would earn as a lump-sum FD. The rate stays editable, so it works for the post office or any bank.
On the default numbers the saving adds up steadily. Paying Rs 5,000 a month at 6.7% for 5 years puts in Rs 3,00,000 and matures to about Rs 3,56,829, so the interest earned is about Rs 56,829. Every installment starts earning from the month you pay it, which is why the later deposits earn far less than the first.
The RD maturity formula
RD maturity is M = R times [(1 + i) to the power n, minus 1] divided by [1 minus (1 + i) to the power minus one-third], where R is the monthly installment, i is the annual rate divided by 400, and n is the number of quarters. The rate is divided by 400 because interest compounds quarterly, so i is the quarterly rate as a decimal, and n counts the quarters in the term. On a Rs 5,000 monthly deposit at 8% for 1 year the formula returns Rs 62,647, the same figure the bank calculators show.
The minus one-third in the denominator is doing quiet work. It accounts for each month's deposit sitting for part of a quarter before the next compounding date, since three months make up one quarter. Without it the formula would assume every deposit lands exactly on a quarter boundary, which is never how a real RD runs.
Where the maturity comes from
About Rs 3,00,000 of the Rs 3,56,829 maturity on the default RD is simply your own deposits, and only about Rs 56,829 is interest. The split matters because an RD earns less than the rate suggests at first glance: your final month's deposit earns interest for a single month, so the effective return on the whole scheme is lower than a one-time deposit at the same rate. The donut above shows the two parts of the maturity at a glance.
That is the trade for being able to save gradually. You do not need a lump sum to start an RD, and the discipline of a fixed monthly debit is the point, so the slightly lower return buys a savings habit.
FD or RD
On the same total money an FD earns more than an RD, because the whole amount is deposited upfront and compounds from day one. The calculator shows this directly: the Rs 3,00,000 you would pay into the default RD over 5 years, if you had it upfront as a lump-sum FD at 6.7%, would mature to about Rs 4,18,220 against the RD's Rs 3,56,829.
| Option | You need upfront | Matures to (5 yr at 6.7%) |
|---|---|---|
| RD, Rs 5,000 a month | Nothing, you save monthly | Rs 3,56,829 |
| FD, Rs 3,00,000 lump sum | The full Rs 3,00,000 | Rs 4,18,220 |
So the choice is not really about the rate, since both use quarterly compounding at the same rate. It is about whether you have the money now or are building it up. The FD calculator covers the lump-sum side in full.
Tax on RD interest, and TDS
RD interest is fully taxable at your income tax slab, and banks deduct 10% TDS once your annual RD interest crosses Rs 50,000, or Rs 1,00,000 for senior citizens, from FY2025-26. These thresholds rose on 1 April 2025, from Rs 40,000 and Rs 50,000. Form 15G or 15H stops the deduction when your total income is below the taxable limit, and TDS is adjusted against your final tax, so it is a cashflow item rather than an extra charge.
On the default Rs 5,000 RD the annual interest is only about Rs 11,366, well below the limit, so no TDS applies. Push the installment to Rs 25,000 a month and the annual interest of about Rs 56,829 crosses the general threshold, so a general depositor sees 10% deducted while a senior citizen, with the Rs 1,00,000 limit, does not. Switch the depositor type to apply the higher senior limit.
Post office and premature closure
The post office recurring deposit pays 6.70% a year compounded quarterly over a 5-year term of 60 installments, with a minimum of Rs 100 a month in multiples of Rs 10. It is the same math as a bank RD, so this calculator works for it once you enter the 6.70% rate. Bank RD rates run a little higher or lower, from about 6.5% to 7.5%, and most banks add about 0.50% for senior citizens where the post office pays everyone the same.
Breaking an RD early costs you. A post office RD allows premature closure only after 3 years, and the interest is then paid at the lower savings-account rate, while banks charge a penalty of about 1% on the applicable rate. For a steady monthly income, the POMIS calculator covers the post office monthly income scheme.
What this does not promise
RD rates are set by each bank and the government, and they change, so the maturity here reflects the rate you enter rather than a live quote. Results follow the standard quarterly formula, and banks differ slightly on how they treat deposits made within a quarter, so your actual maturity can vary by a small amount. The TDS figure is an estimate on the current thresholds and is adjusted against your total tax. RD terms are set by the bank and the RBI, and this is not investment or tax advice, so a qualified adviser can confirm how a recurring deposit fits your plans.
Frequently asked questions
What is an RD calculator? An RD calculator works out the maturity value of a recurring deposit from your monthly installment, the interest rate and the tenure, using quarterly compounding. A Rs 5,000 monthly RD at 6.7% for 5 years matures to about Rs 3,56,829, on Rs 3,00,000 deposited.
What is the RD maturity formula? RD maturity is M = R times [(1 + i) to the power n, minus 1] divided by [1 minus (1 + i) to the power minus one-third], where R is the monthly installment, i is the annual rate divided by 400, and n is the number of quarters. This compounds each installment quarterly, so Rs 5,000 a month at 8% for 1 year gives Rs 62,647.
What is the post office RD interest rate? The post office recurring deposit pays 6.70% per annum, compounded quarterly, over a 5-year term of 60 monthly installments, with a minimum of Rs 100 a month in multiples of Rs 10. Bank RD rates vary from about 6.5% to 7.5%, so enter your bank rate in the calculator.
How much will 2,000 a month for 5 years give in a post office RD? A Rs 2,000 monthly post office RD grows to about Rs 1,44,246 over 5 years at 7.1%, on Rs 1,20,000 deposited, so it earns roughly Rs 24,000 of interest. The exact figure moves with the rate, which the government revises each quarter.
Is an FD or an RD better? An FD earns more than an RD for the same total money, because the whole amount is deposited upfront and compounds from day one, while an RD builds up month by month. On Rs 3,00,000, a lump-sum FD reaches about Rs 4,18,220 against an RD maturity of Rs 3,56,829, but the RD suits savers who do not have the lump sum ready.
Is RD interest taxable, and what is the TDS? RD interest is fully taxable at your income tax slab, and banks deduct 10% TDS once your annual RD interest crosses Rs 50,000, or Rs 1,00,000 for senior citizens, from FY2025-26. Form 15G or 15H stops the deduction if your total income is below the taxable limit.
Can I close an RD early? A post office RD allows premature closure after 3 years, and the interest is then paid at the lower savings-account rate, while banks charge a penalty of about 1% on the applicable rate. Breaking an RD early therefore returns less than the maturity value shown here.
Do senior citizens get a higher RD rate? Most banks add about 0.50% to the RD rate for senior citizens aged 60 and above, and the TDS-free interest limit is higher at Rs 1,00,000 a year. The post office pays the same rate to everyone, so the senior benefit there is only the higher TDS limit.