RD Calculator
Calculate your Recurring Deposit maturity amount and interest earnings with our free, accurate RD calculator
🏦What is a Recurring Deposit?
A Recurring Deposit (RD) is a term deposit offered by banks and financial institutions where you deposit a fixed amount every month for a predetermined period. It combines the flexibility of a savings account with the higher returns of a fixed deposit.
- ✓Fixed monthly deposits for a specific tenure
- ✓Higher interest rates than savings accounts
- ✓Disciplined saving habit development
- ✓Flexible tenure options (6 months to 10 years)
🧮RD Formula Explanation
Maturity = P × [(1 + r/n)^(nt) – 1] / [1 – (1 + r/n)^(-1/n)]
P = Monthly deposit amount
r = Annual interest rate ÷ 100
n = Compounding frequency per year
t = Tenure in years
The formula accounts for compound interest on each monthly deposit, with interest being compounded at the specified frequency (monthly, quarterly, half-yearly, or yearly).
💡Tax Implications Summary
Interest Taxation
Interest earned on RD is taxable as per your income tax slab. TDS is deducted if interest exceeds ₹40,000 per year.
TDS Deduction
Banks deduct TDS at 10% if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).
Form 15G/15H
Submit Form 15G (below 60 years) or 15H (senior citizens) to avoid TDS if total income is below taxable limit.
Recurring Deposit Maturity Formula
Step-by-Step Calculation Example
Given Values
- Monthly Deposit (P) = ₹5,000
- Interest Rate (r) = 7.5% per annum
- Tenure (t) = 5 years (60 months)
- Compounding = Monthly (n = 12)
Calculation Steps
- Convert rate: r = 7.5/100 = 0.075
- Monthly rate: r/n = 0.075/12 = 0.00625
- Total periods: n×t = 12×5 = 60
- Apply RD formula
Result
- Maturity Amount = ₹3,64,476
- Total Investment = ₹3,00,000
- Interest Earned = ₹64,476
- Effective Return = 21.49%
Key Points
- • Interest compounds on each deposit
- • Earlier deposits earn more interest
- • Higher frequency = better returns
- • Penalty for premature withdrawal
Impact of Compounding Frequency
| Compounding | Frequency (n) | Maturity Amount* | Interest Earned* |
|---|---|---|---|
| Yearly | 1 | ₹3,61,725 | ₹61,725 |
| Half-Yearly | 2 | ₹3,63,089 | ₹63,089 |
| Quarterly | 4 | ₹3,63,775 | ₹63,775 |
| Monthly | 12 | ₹3,64,476 | ₹64,476 |
*Based on ₹5,000 monthly deposit, 7.5% interest rate, 5-year tenure