A Recurring Deposit (RD) is one of India’s most popular savings instruments – combining the discipline of fixed monthly savings with the guaranteed returns of a fixed deposit. Whether you are saving for a short-term goal, building an emergency fund, Read more 
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An RD Calculator is a simple online tool that helps you estimate how much your recurring deposit can grow over time. You just need to enter three basic details: your monthly investment, the tenure, and the interest rate.
Once you add these, the calculator gives you a clear picture of your returns, including:
Since RD interest is compounded quarterly, calculating returns manually can get a bit complicated. Each monthly deposit earns interest for a different period, depending on when it was made.
That’s where an RD Calculator becomes useful. It does all the calculations instantly and saves you from working through the formula multiple times.
A Recurring Deposit is a type of term deposit offered by banks, Post Offices, and Non-Banking Financial Companies (NBFCs) that allows investors to deposit a fixed sum of money every month for a pre-determined tenure and earn a fixed interest rate on it.
Key features of a Recurring Deposit:
| RD Type | Who Can Open | Key Feature |
|---|---|---|
| Regular RD | Indian residents above 18 years | Standard quarterly compounding; TDS applicable |
| Senior Citizen RD | Indian residents aged 60 years and above | Additional interest benefit; higher TDS threshold |
| Minor RD | Minors (below 18 years) | Encourages early savings habit |
| NRE RD | Non-Resident Indians (NRIs) | Repatriable funds; tax-free interest |
| NRO RD | NRIs (income earned in India) | Interest taxable; TDS applicable |
| Post Office RD | All Indian residents | Government-backed, fixed tenure |
RD interest rates are linked to FD rates and change based on RBI policies. Below are indicative rates:
| Bank | 1 Year | 2 Years | 3–5 Years | Senior Extra |
|---|---|---|---|---|
| SBI | 6.25% | 6.45% | 6.05%–6.30% | +0.50% |
| HDFC | 6.60% | 7.00% | 7.00% | +0.50% |
| ICICI | 6.70% | 7.00% | 6.90%–7.00% | +0.50% |
| Axis | 6.70% | 7.10% | 7.00%–7.10% | +0.50% |
| Kotak | 7.10% | 7.10% | 6.20% | +0.50% |
| Post Office | 6.70% | 6.70% | 6.70% | N/A |
Note: Interest rates are indicative and subject to change. Always verify with your bank before investing.
The standard bank formula for RD maturity is: M = R × [(1 + i)^n – 1] / [1 – (1 + i)^(–1/3)]. Where M is the maturity value, R is the monthly deposit amount, i is the quarterly interest rate (annual rate ÷ 400), and n is the number of quarters (tenure in months ÷ 3). Since RD interest is compounded quarterly in most banks, this formula accounts for the fact that each monthly instalment earns compound interest for a different number of quarters depending on when it was deposited.
Interest on bank RDs is compounded quarterly in India, as per RBI and Indian Banks' Association (IBA) guidelines. This means interest is calculated and added to the account balance every three months. Post Office RDs also compound quarterly. An exception: if you open an RD account in the middle of a financial quarter (e.g., in May), the deposit earns simple interest from the date of opening until the end of that quarter (June), after which quarterly compounding begins.
Yes, TDS may be deducted on the interest you earn from a recurring deposit, but only after a certain limit is crossed. For most individuals, banks start deducting TDS at 10% if their total interest in a financial year goes beyond ₹40,000. For senior citizens aged 60 and above, this threshold is higher at ₹1,00,000 from FY 2025–26 onwards. If you haven’t submitted your PAN details to the bank, the TDS rate can go up to 20%, which is significantly higher. If your total income is below the taxable limit, you can avoid TDS by submitting Form 15G or Form 15H to your bank at the beginning of the financial year.
Yes, most banks allow premature withdrawal of RDs, but with a penalty. Typically, the bank pays interest at 0.50%–1.00% less than the applicable rate for the period the RD was held. For example, if your contracted RD rate is 7% and you withdraw after 1 year of a 2-year RD, the bank may pay you a 1-year rate minus 1% penalty = approximately 5.25%–5.75%. Post Office RDs can be closed prematurely after completing 3 years, with a small penalty. Partial withdrawal is generally not allowed in RDs – it's either full premature closure or continuation till maturity.
The Post Office Recurring Deposit is backed by the Government of India, making it one of the safest savings instruments. Key differences: Post Office RD has a fixed tenure of 5 years (extendable by another 5 years), while bank RDs offer flexible tenures from 6 months to 10 years. The current Post Office RD rate is 6.70% p.a. (Q3 FY 2025-26), compounded quarterly, which is set quarterly by the Finance Ministry. Bank RD rates vary by bank and tenure, ranging from 5.50% to 7.50% p.a. Post Office RD has no TDS deduction. Premature withdrawal for Post Office RD is allowed after 3 years, with interest paid at Post Office Savings Account rate (4% p.a.) for the completed period.
