What is the RD Calculator?
A Recurring Deposit (RD) calculator helps you estimate the maturity amount you will receive at the end of your RD tenure based on your monthly deposit amount, interest rate, and investment period. Whether you are saving with a public sector bank, a private bank, India Post, or a small finance bank, this tool gives you an instant projection so you can plan your finances with confidence rather than guessing.
Indians have long favoured RDs for disciplined, low-risk savings. Unlike a Fixed Deposit that requires a lump sum upfront, an RD lets you invest a fixed amount every month — making it ideal for salaried individuals and small business owners who accumulate money gradually. RBI-regulated banks are required to offer RDs, and interest rates are set freely by individual banks within the RBI's policy framework. As of FY 2026-27, leading banks offer RD rates between 6.5% and 7.5% per annum for general citizens, while senior citizens typically earn an additional 0.25%–0.75%.
One often-overlooked detail is that RD interest is compounded quarterly in India (not annually or monthly), which affects your actual returns. The RD calculator on Niyamfin accounts for this quarterly compounding convention, giving you accurate maturity values that match what your bank statement will show — not an inflated estimate.
How does it work?
Indian banks calculate RD maturity using a quarterly compounding formula. The standard formula is: M = R × [(1 + i)^n – 1] / (1 – (1 + i)^(–1/3)), where M is the maturity amount, R is the monthly deposit, i is the quarterly interest rate (annual rate divided by 4), and n is the total number of quarters. Each monthly instalment is treated as earning interest from the date of deposit until the maturity date, compounded every quarter. This is why the formula looks different from a simple SIP formula — the compounding period (quarter) does not align with the deposit period (month), requiring the bridging term (1 + i)^(–1/3).
The key inputs are: (1) Monthly deposit — the fixed amount you commit each month, typically between ₹100 and ₹1,00,000; (2) Annual interest rate — as offered by your chosen bank or India Post; (3) Tenure — expressed in months or years, commonly 6 months to 10 years. The calculator computes total principal invested (monthly deposit × number of months), total interest earned, and the final maturity amount. It also shows the effective yield so you can compare across tenures.
It is important to note that Tax Deducted at Source (TDS) applies to RD interest. Under Section 194A of the Income Tax Act, banks deduct TDS at 10% if your total interest income from all deposits with that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). The calculator shows pre-tax maturity values; you should factor in your income tax slab to estimate take-home returns.
Worked example
Consider Priya, a 28-year-old school teacher in Pune earning ₹6 LPA. She wants to save ₹5,000 every month for 3 years (36 months) towards her wedding fund. Her bank offers an RD interest rate of 7.0% per annum, compounded quarterly. Using the RD calculator: total principal invested = ₹5,000 × 36 = ₹1,80,000. With quarterly compounding at 7%, the total interest earned works out to approximately ₹19,900, giving a maturity value of roughly ₹1,99,900. If she were to compare this with India Post RD (currently offering around 6.7% for a 5-year RD), the maturity would differ — the calculator makes this comparison instant.
Now suppose Priya is a senior citizen — say, her mother investing ₹10,000/month for 2 years at the senior citizen rate of 7.75%. Total principal = ₹2,40,000; estimated interest = approximately ₹25,600; maturity value = roughly ₹2,65,600. Because her annual interest income will exceed ₹50,000 across accounts, TDS at 10% will be deducted by the bank. She should submit Form 15H (senior citizens) if her total income is below the basic exemption limit to avoid unnecessary TDS deduction — a step the calculator's output notes prompt her to consider.
When to use this calculator
- 1You are a salaried professional who receives a monthly salary and wants to build a corpus for a specific goal — a vacation, a gadget, a down payment — over 1–3 years without taking on any market risk.
- 2You want to compare RD interest rates across SBI, HDFC Bank, ICICI Bank, India Post, and small finance banks like AU or Equitas before opening an account, to ensure you pick the best rate for your tenure.
- 3You are a parent planning to open an RD in your child's name (minor account) to accumulate funds for school fees or a laptop purchase at a known future date.
- 4You are a senior citizen evaluating whether a bank RD at 7.5% or a post office RD at 6.7% gives better net-of-TDS returns given your tax situation and the applicable TDS threshold.
- 5You want to ladder multiple RDs — for example, three separate ₹3,000/month RDs maturing every 6 months — and need to calculate each maturity amount to ensure liquidity at regular intervals.
Common mistakes to avoid
- ✕Ignoring TDS on RD interest: Many investors assume the maturity amount shown by the bank is fully tax-free. In reality, interest is added to your taxable income every year under 'Income from Other Sources', and if it crosses ₹40,000 (₹50,000 for seniors), TDS is deducted. Failing to plan for this can distort your savings goal.
- ✕Choosing tenure based only on interest rate without considering liquidity: A higher rate on a 5-year RD may look attractive, but premature withdrawal typically attracts a 0.5%–1% penalty and forfeits the promised rate. Locking in for longer than your actual goal timeline is a common and costly error.
- ✕Not comparing India Post RD with bank RDs: India Post offers sovereign-backed RDs (5-year tenure, currently 6.7%) that are extremely safe, yet most urban investors never consider them. The post office RD is backed by the Government of India and is often overlooked purely due to lack of awareness.
- ✕Confusing compounding frequency: Some investors assume annual compounding and underestimate actual returns, while others assume monthly compounding and overestimate. All Indian bank RDs compound quarterly — using a simple interest estimate or annual compounding will give you an incorrect maturity figure.
- ✕Missing Form 15G/15H submission: Eligible investors (income below taxable limit) who do not submit Form 15G (or 15H for seniors) at the start of the financial year end up having TDS deducted unnecessarily, requiring them to claim a refund — a hassle that is entirely avoidable.
Frequently asked questions
- What is the current RD interest rate in India for FY 2026-27?
- RD interest rates vary by bank and tenure. As of mid-2026, SBI offers 6.5%–7.0% for general citizens on RDs of 1–5 years, while small finance banks like AU Small Finance Bank and Equitas offer 7.25%–8.0% for select tenures. Senior citizens earn an additional 0.25%–0.75% over the general rate. India Post offers 6.7% p.a. on its 5-year RD scheme. Always check your bank's official website for the latest rates, as they change with RBI repo rate movements.
- Is RD interest taxable in India?
- Yes. RD interest is fully taxable in India under the head 'Income from Other Sources', regardless of the tenure or the bank. The interest accrues each year and must be declared in your ITR for that year — not just in the year of maturity. Banks deduct TDS at 10% (20% if PAN is not furnished) when aggregate interest from all deposits at that branch exceeds ₹40,000 per year (₹50,000 for senior citizens). You can avoid TDS by submitting Form 15G (below 60 years) or Form 15H (60 years and above) if your total income is below the basic exemption limit.
- Can I open an RD account online in India?
- Yes. All major banks — SBI, HDFC, ICICI, Axis, Kotak, and others — allow you to open an RD account through their net banking or mobile app instantly if you have an existing savings account. India Post also allows online RD account opening via its India Post Payments Bank (IPPB) app linked to a post office savings account. The minimum deposit is as low as ₹100/month at India Post and ₹500–₹1,000/month at most banks.
- What happens if I miss an RD instalment?
- Missing an RD instalment results in a penalty. Most banks charge ₹1–₹2 per ₹100 of the defaulted instalment per month of default. If you miss instalments for a continuous period (typically 3–6 consecutive months depending on the bank's policy), the bank may close the RD prematurely and pay interest at the savings account rate or at a penalised rate. It is advisable to set up an auto-debit mandate from your salary account to avoid missed payments.
- How is an RD different from a SIP in a mutual fund?
- An RD is a guaranteed-return, bank deposit product regulated by RBI. Your principal is fully protected (deposits are insured up to ₹5 lakh per depositor per bank under DICGC), and returns are fixed at the time of opening the account. A SIP (Systematic Investment Plan) in a mutual fund is market-linked, regulated by SEBI, and offers no guaranteed returns — but has historically delivered higher long-term returns than RDs, especially in equity mutual funds over 5+ year horizons. RDs are suited for short-to-medium term goals with zero risk tolerance, while SIPs are better for long-term wealth creation with an ability to accept market volatility.