Worked example
Example with the default numbers — change them above.
Monthly deposit: ₹5,000 · Interest rate (a year): 6.8% · Tenure: 60 months · Senior citizen (adds 0.5% to the rate): No
Depositing ₹5,000 a month for 5 yrs in an RD at 6.8% gives ₹3.58 L at maturity: ₹3 L deposited plus ₹57,771 interest.
| Maturity amount | ₹3.58 L · after 5 yrs |
|---|---|
| Total deposited | ₹3 L · ₹5,000 × 60 months |
| Interest earned | ₹57,771 · 19.3% on top of what you deposit |
| Real return after inflation | 0.92% · Before tax, after 6% inflation |
How the RD Calculator works
- Enter the amount you will deposit every month, the interest rate your bank quotes and the tenure in months.
- Each monthly deposit starts earning from the month it is made, and interest is added every quarter, as most Indian banks and India Post do.
- The calculator grows every deposit for the number of months it stays in, so earlier deposits earn more than later ones, then adds them all up for the maturity amount.
- Interest earned is the maturity amount minus the total you deposited.
- If you pick an income-tax slab, it takes that share of the interest as tax and adjusts the yield for inflation to show your real return.
Recurring deposit maturity amount
M = Σ D × (1 + r / n) ^ (n × k / 12), for k = 1 to the number of months
M = amount at maturity
D = monthly deposit
r = yearly interest rate as a decimal (6.8% is 0.068)
n = times interest is added in a year (quarterly is 4)
k = months a deposit stays in the account (the first deposit stays for the full tenure)Assumptions and limits
- The rate is yours to set. The 6.8% starting rate is a placeholder from this site's data file, not any bank's current offer.
- Interest is added quarterly. Banks and India Post use slightly different day counts, so your bank's maturity value can differ by a few rupees.
- Every deposit is assumed to be made on time at the start of its month. A late deposit usually earns a small penalty or less interest.
- Tax uses the slab rate you pick on all the interest (before 4% cess and surcharge). In real life tax is due each year, and TDS is only an advance.
- Real return uses a steady inflation figure you choose, and treats the yield as the quoted rate compounded quarterly.
- Bank deposits are insured by DICGC up to ₹5 lakh per depositor per bank, interest included; amounts above that at one bank are not insured.
Frequently asked questions
How is RD maturity amount calculated?
Each monthly deposit earns interest for the months it stays in the account, with interest added every quarter. The calculator grows every deposit that way and adds them up. For example, ₹5,000 a month for 5 years at 6.8% gives about ₹3.58 lakh, of which ₹3 lakh is your deposits. Enter your own numbers above for your result.
Is RD interest taxable?
Yes. RD interest is added to your income and taxed at your slab rate. Banks deduct TDS on all of it, 10% with your PAN or 20% without, if your total interest at that bank crosses a yearly limit. TDS is only an advance, so you may owe more or get a refund when you file. If your tax will be nil, Form 121 (which replaced Forms 15G and 15H) stops the deduction.
Is an RD better than a SIP?
They suit different goals. An RD offers a fixed, known return and low risk, which fits goals under about three years or an emergency fund. A SIP in equity funds can earn more over long periods but its value moves up and down and is not guaranteed. Many people use both. Compare with the SIP calculator for your numbers.
What happens if I miss an RD instalment?
Most banks charge a small penalty for each late or missed instalment, often a few rupees per ₹100, and some close the account after several missed deposits. The rules differ by bank, so check yours. This calculator assumes every deposit is made on time and does not model penalties.
How often is interest added in an RD?
Most Indian banks and India Post add RD interest every quarter, so the interest earned in one quarter starts earning interest in the next. That is why the effective yearly return is a little higher than the quoted rate. This calculator uses quarterly compounding, which is the usual practice.
Can I withdraw an RD before maturity?
Most banks allow premature closure, but the interest is usually paid at a lower rate, often the rate for the period the money actually stayed, minus a small penalty. Rules differ by bank. This calculator shows the result if you stay until maturity and does not model early withdrawal.
Sources
- Income Tax Department: Income-tax Act, 2025, section 393 – TDS on interest (old section 194A)
- DICGC (RBI subsidiary): deposit insurance of up to ₹5 lakh per depositor per bank
Logic and rates last verified on .
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