MoneyWiseGuide
Calculate your Recurring Deposit returns with accurate quarterly compounding methodology
Min: ₹100 | Max: ₹1,00,00,000
Min: 4% | Max: 20%
Min: 1 year | Max: 10 years
Min: 0 months | Max: 11 months
Enter your RD details to see your investment projection
A Recurring Deposit is a savings scheme where you deposit a fixed amount every month for a predetermined period. It offers guaranteed returns with quarterly compounding, making it ideal for building savings systematically.
Our calculator uses quarterly compounding as per Indian banking practices. Each monthly deposit compounds individually for the remaining tenure, matching major banks like SBI, HDFC, and ICICI.
A Recurring Deposit is a special type of term deposit offered by banks and financial institutions where you invest a fixed amount every month for a predetermined period. It's ideal for individuals who want to save regularly and earn fixed returns. RDs are particularly suitable for salaried individuals who can set aside a fixed amount from their monthly income.
Interest on RD is calculated on a quarterly compounding basis using the formula: M = R × [(1 + i)^n - 1] / (1 - (1 + i)^(-1/3)), where M is maturity amount, R is monthly installment, n is number of quarters, and i is quarterly interest rate. The interest earned is added to your principal, making it a compounding investment that grows faster over time.
Yes, premature withdrawal is allowed but typically comes with penalties. Most banks charge a penalty of 0.5-1% on the applicable interest rate. Some banks also have a minimum lock-in period (usually 3-6 months) before which premature withdrawal is not permitted. However, you can take a loan against your RD without breaking it, which is usually a better option.
In a Recurring Deposit (RD), you invest a fixed amount monthly over a tenure, making it ideal for regular savings. In a Fixed Deposit (FD), you invest a lump sum amount at once. RDs are better for those who want to build a saving habit with monthly investments, while FDs are suitable for those who have a lump sum to invest. Interest rates are usually similar for both, though FDs may sometimes offer slightly better rates.
The minimum monthly deposit varies by bank but typically ranges from ₹100 to ₹1,000. There is usually no maximum limit, though some banks may have internal caps. Post Office RD requires a minimum of ₹100 per month with no maximum limit. You can open multiple RD accounts if you want to invest more than the maximum limit of a single account.
RD tenure typically ranges from 6 months to 10 years, though the most common tenures are 1, 2, 3, and 5 years. Post Office RD has a fixed tenure of 5 years. Some banks allow flexible tenures in multiples of 3 months. Longer tenures generally offer higher interest rates, making them more beneficial for long-term wealth accumulation.
Yes, interest earned on RD is fully taxable as per your income tax slab. Banks deduct TDS (Tax Deducted at Source) if the interest earned exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). However, you can submit Form 15G/15H if your total income is below the taxable limit to avoid TDS deduction. Unlike PPF or EPF, RD does not offer any tax deduction benefits under Section 80C.
Missing RD installments attracts penalty charges, typically ranging from ₹1 to ₹5 per ₹100 of installment per month, depending on the bank. However, most banks allow a grace period of 1-2 months before applying penalties. If you default for extended periods, the RD may be discontinued. It's advisable to ensure timely payments to avoid penalties and maximize returns. Setting up auto-debit from your savings account is the best way to ensure regular payments.