What is a Recurring Deposit (RD)?

A Recurring Deposit is a term deposit helper offered by banks in India, allowing individuals to deposit a fixed amount monthly over a chosen period and earn interest compounding quarterly.

What is the RD interest calculation formula?

RD maturity amount compounding quarterly is calculated using: M = R × ((1 + i)^n - 1) / (1 - (1+i)^(-1/3)), where R is the monthly deposit, i = annual rate / 400, and n = total quarters (months / 3).

Is RD interest taxed in India?

Yes, interest earned on Recurring Deposits is subject to income tax according to your tax slab. If total interest earned across your accounts in a bank exceeds ₹40,000 (₹50,000 for senior citizens), TDS at 10% is deducted.

Can I withdraw RD before maturity?

Yes, premature closure of RD accounts is allowed. However, the interest paid will be slightly lower than the contracted rate, usually 0.5% to 1% penalty depending on the bank.

What is the minimum tenure for an RD?

The minimum tenure for a Recurring Deposit account is typically 6 months, and the maximum tenure can extend up to 10 years (120 months).

RD Calculator

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Calculate the maturity amount and interest earned on your Recurring Deposits (RD) compounding quarterly. Customize monthly deposits, rate, and tenure.

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Recurring Deposit Parameters

Monthly Deposit Amount

₹

Interest Rate (% p.a.)

Tenure (Months)

Mths

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How to Use the Recurring Deposit (RD) Calculator

Quickly estimate returns on your Recurring Deposits:

Adjust the Monthly Deposit Amount slider to set your periodic savings.
Drag the Interest Rate slider to select the annual rate p.a.
Define the investment Tenure in months.
Click Calculate Returns to review your maturity projection, total deposits, and interest growth.

Recurring Deposit Calculation Formula

RD maturity values in India compound quarterly and are calculated using the following mathematical formula:

M = R × ((1 + i)^n - 1) / (1 - (1+i)^(-1/3))

M = Maturity Value Amount

R = Monthly deposit amount

i = Quarterly interest rate (Annual Rate / 400)

n = Number of quarters (Tenure in months / 3)

Frequently Asked Questions

What is a Recurring Deposit?

A Recurring Deposit (RD) is a savings option offered by banks that allows customers to make regular monthly deposits and earn interest rates comparable to Fixed Deposits.

How is compounding done on RDs?

In India, bank RD interest compounding is calculated quarterly using the formula designated by the Indian Banks' Association (IBA).

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Is TDS applicable on RDs?

Yes, TDS is deducted at 10% on RD interest earned if it exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).

Can general public and senior citizens have different RD rates?

Yes, banks typically offer an additional interest rate of 0.50% to senior citizens for both fixed deposits and recurring deposits.

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