RD Calculator (Recurring Deposit)

What is a Recurring Deposit (RD)?

A Recurring Deposit (RD) is a special kind of term deposit offered by banks and post offices in India. It allows individuals to deposit a fixed amount of money every month for a predetermined period (tenure). RDs help instill a habit of regular savings and offer a fixed interest rate for the duration of the deposit.

How RD Works

You choose a monthly deposit amount and a tenure (typically ranging from 6 months to 10 years). Interest is usually compounded quarterly (every three months) on the accumulated balance and added to the principal. At the end of the tenure, you receive the total amount deposited plus the accumulated interest (maturity amount). Failure to make monthly deposits can sometimes attract penalties.

Key Features of RD

• Regular Savings: Encourages disciplined monthly savings.
• Fixed Interest Rate: The interest rate is fixed at the time of opening the account and applies for the entire tenure, providing predictable returns.
• Flexible Tenure: Choose a tenure that aligns with your financial goals (usually 6 months to 10 years).
• Loan Facility: Some banks offer loans against the RD balance.
• Safety: Bank RDs are generally considered safe, with deposits up to ₹5 Lakh insured by DICGC. Post Office RDs are backed by the government.
• TDS: Interest earned on RDs is taxable as per your income slab. TDS (Tax Deducted at Source) is applicable if the interest earned exceeds certain limits (₹40,000 for regular individuals, ₹50,000 for senior citizens per financial year, across all branches of a bank).

Disclaimer: This calculator provides estimates based on the inputs and quarterly compounding. Interest rates and compounding frequency may vary slightly between institutions. TDS rules are subject to change. Consult your bank/post office or a financial advisor for specific details and advice.