Is RD interest compounded quarterly or monthly?

Most Indian banks compound RD interest quarterly, which gives a very slightly different result from the monthly-compounding figure this calculator shows — usually a small difference on a typical RD. Check your bank's specific compounding frequency for an exact figure; this calculator is accurate enough for comparing RD against other options.

Is RD interest taxable?

Yes — RD interest is added to your taxable income and taxed at your slab rate, the same as FD interest. Banks deduct TDS once interest crosses the threshold set for the year, but tax is owed on the full interest regardless of TDS.

RD or FD — which is better?

An FD suits a lump sum you already have; an RD suits building one up through monthly savings you don't yet have in hand. For the same total amount invested over the same period, FD generally earns slightly more, since the full sum compounds from day one rather than arriving gradually.

What happens if I miss an RD installment?

Most banks charge a small penalty per missed installment, and missing several can lead to the account being closed early on some banks' terms. Check your specific bank's policy before committing to a monthly amount you might not sustain.

Loan & interestIndia only

RD Calculator

Estimate your recurring deposit's maturity value and interest earned, for an Indian bank RD with a fixed monthly deposit.

Monthly deposit₹5,000

Interest rate (p.a.) %7%

Duration (Years)5 Years

Maturity amount

₹3,60,053

Interest earned₹60,053

Total deposited₹3,00,000

Illustrative only — most banks compound RD interest quarterly rather than monthly, which can give a slightly different figure. Check your bank's actual terms before relying on this for a real decision.

What is a recurring deposit (RD) calculator?

A recurring deposit lets you build up savings by depositing a fixed amount every month, at a fixed interest rate set when you open the account — unlike a fixed deposit, which needs the full sum upfront. An RD calculator estimates the maturity value: what all those monthly deposits plus their accumulated interest add up to by the end of the tenure.

Mechanically, an RD is the same idea as a SIP: a fixed amount invested every month, compounding until a target date. The difference is that an RD's rate is fixed by the bank at opening, like an FD, rather than depending on market returns.

How is RD maturity calculated?

Each monthly deposit compounds from the month it's made until maturity:

Maturity Value = R × [(1 + i)^n − 1] / i × (1 + i)

Here R is the monthly deposit, i is the monthly interest rate (annual rate ÷ 12), and n is the number of months. A ₹5,000 monthly deposit at 7% for 5 years (60 months) matures at about ₹3,60,053 — ₹3,00,000deposited and about ₹60,053 earned in interest.

This calculator compounds monthly for simplicity; most Indian banks actually compound RD interest quarterly, which gives a slightly different number on the same inputs — close enough for comparing options, but check your bank's exact terms before relying on it for a real decision.

Benefits of a recurring deposit

Builds a savings habit

A fixed monthly commitment makes saving automatic rather than whatever's left over at month-end.

Low minimum

Most banks let you start an RD with a few hundred rupees a month, far below an FD's typical minimum.

Predictable return

The rate is fixed at opening, so the maturity value doesn't move with the market.

Doesn't need a lump sum

Useful for a goal you're saving toward, not one you already have the money for.

LessonCompound Interest — Understand how time, consistency and returns interact — the single most important idea in personal finance.
CalculatorFixed Deposit Calculator — Maturity value and interest earned on a fixed deposit, at your compounding frequency.

Common questions

Each monthly deposit compounds from the month it's made until maturity, the same way a SIP does — so the first deposit earns interest for the longest and the last deposit earns almost none. The total maturity value is the sum of all deposits plus all the interest they've individually earned.