Total Invested Amount
₹ 1,80,000
Total Interest Earned
₹ 19,258
Tenure Applied
3.0 Years (36 Months)
Total Maturity Value
₹ 1,99,258
About the Recurring Deposit (RD) Calculator
Our free Recurring Deposit (RD) Calculator helps savers determine the maturity value and cumulative compound interest earned on regular monthly deposits made into a bank or post office recurring deposit account.
1. Recurring Deposit Mathematical Formulas
Recurring Deposit maturity values are computed by aggregating quarterly compounding interest for each monthly installment over its respective remaining tenure:
Total Maturity Value = Sum of each monthly installment compounded quarterly across remaining months
A = Sum(P × (1 + (r / 4))(4 × n) / 12)
Total Interest Earned = Total Maturity Value − Total Invested Amount
Where the defined variables are:
- Monthly Deposit Amount (P): Fixed monthly savings installment.
- Annual Interest Rate (r): Nominal annual percentage rate (p.a.) offered by the bank.
- Tenure (n): Total duration of the recurring deposit expressed in months.
2. Practical Worked Example
Let us review a standard recurring deposit calculation scenario:
- Monthly Deposit Amount: ₹5,000
- Interest Rate: 6.5% per annum
- Deposit Tenure: 3 years (36 months)
Calculation Breakdown:
- Total Invested Amount = ₹5,000 × 36 months = ₹1,80,000
- Total Maturity Value (calculated via quarterly compounding across 36 monthly deposits) $\approx$ ₹1,99,258
- Total Interest Earned = ₹1,99,258 − ₹1,80,000 = ₹19,258
Planning your monthly savings with a recurring deposit calculator ensures disciplined financial growth!
3. Frequently Asked Questions (FAQs)
1. Is interest earned on Recurring Deposits taxable in India?
Yes, interest earned on an RD is fully taxable according to your income tax slab. Banks also deduct Tax Deducted at Source (TDS) if the interest exceeds ₹40,000 (or ₹50,000 for senior citizens) in a financial year.
2. What is the minimum and maximum tenure for an RD?
The minimum tenure for a Recurring Deposit is typically 6 months, while the maximum tenure can extend up to 10 years depending on the bank's guidelines.
3. Can I miss a monthly RD installment without penalty?
Missing a monthly installment or delaying payment usually attracts a small nominal penalty fee levied by the bank, and consistent defaults may lead to account closure.
4. Can I prematurely withdraw or close my Recurring Deposit?
Yes, banks permit premature closure of RDs, though a nominal penalty (usually 0.5% to 1% reduction in interest rate) is applied for the period the deposit remained active.
5. Do post office recurring deposits offer different terms than banks?
Post Office Recurring Deposits have a standard tenure of 5 years with interest rates set by the central government quarterly, backed by sovereign guarantee.
6. Can I take a loan against my Recurring Deposit?
Yes, many banks allow overdraft facilities or loans against recurring deposits, usually up to 75% to 90% of the accumulated deposit value.
7. How does RD compounding frequency affect final returns?
Most Indian banks compound RD interest quarterly, meaning interest is calculated and credited every three months on the accumulated balance.
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