RD calculator
A recurring deposit (RD) takes the same sum every month for a fixed term and pays it back with interest at the end. Banks and the post office add the interest every quarter, so each month's deposit earns interest on its interest for as long as it is held.
What a recurring deposit pays at maturity: a fixed sum put in every month at a set rate
- Deposited
- ₹1,20,000
- Interest earned
- ₹9,099
- Maturity amount
- ₹1,29,099
Value at each quarter end
- Deposited
- Interest earned
What if
12 more months
₹2,00,686
₹71,588 higher
₹1,000 more a month
₹1,54,919
₹25,820 higher
0.5% more interest
₹1,29,776
₹677 higher
How it is worked out
Each month's deposit grows at the rate for the months it is held: deposit × (1 + r ÷ m)^(m × months held ÷ 12), where r is the yearly rate and m the times interest is added in a year (4 for quarterly). The maturity amount is the sum over every month.
For example, ₹100 a month for 60 months at 6.7% a year, added quarterly, comes to ₹7,136.58 at maturity: ₹6,000 deposited and ₹1,136.58 interest.
Tax deducted at source on interest is not taken off, and a deposit paid late, which most banks charge a penalty for, is not counted.
About RD calculator
The RD calculator works out what a recurring deposit pays at maturity. A recurring deposit (RD) takes the same sum every month for a fixed term and returns it with interest at the end. The page shows the maturity amount, the total deposited and the interest earned.
How it is calculated
Each monthly deposit earns interest for the months it stays in the account, and interest is added a set number of times a year. A deposit grows to deposit × (1 + r ÷ m)^(m × months held ÷ 12), where r is the yearly rate and m is how often interest is added: 4 for quarterly, 2 for half-yearly, 1 for yearly, 12 for monthly. The maturity amount is the sum of this value over every monthly deposit. The first deposit is held for the whole term and the last for one month.
Example: ₹5,000 a month
₹5,000 a month for 60 months at 7% a year, with interest added quarterly. The 60 deposits total ₹3,00,000. Added up, they grow to ₹3,59,664, so the interest earned is ₹59,664. Banks in India usually add RD interest quarterly. Monthly addition at the same rate gives ₹3,60,053.
Inputs
The deposit runs from ₹100 to ₹10,00,000 a month, the rate from 1% to 15% a year, and the tenure from 6 to 120 months. A chart shows the deposited amount and the interest quarter by quarter. What-if rows show the same RD with 12 more months, ₹1,000 more a month, or 0.5% more interest.
Interest and tax
RD interest is taxed as income from other sources at the depositor's slab rate; the deposits themselves are not taxed. A bank deducts tax at source (TDS) at 10% when the interest it pays in a financial year, across all of a person's FDs and RDs with it, goes above ₹50,000, or ₹1,00,000 for a senior citizen. Once the limit is crossed, TDS applies to the whole interest, not only the excess.
What the figures exclude
Tax deducted at source is not subtracted from the figures. Late deposits, which most banks charge a penalty on, are not counted. Banks differ in how they count days and round amounts, so a bank's own maturity figure can differ by a small amount. Early closure is not modelled.