What this calculates
Enter the amount you deposit every month, the rate your bank quotes and the tenure, and this shows what the recurring deposit pays at maturity, how much of that you deposited and how much is interest. A growth curve and a year-by-year table show how it builds up.
No bank's rate is built in: enter the rate your bank offers for your tenure.
The formula
Each instalment is paid at the start of its month and compounds quarterly for the months it has left until maturity.
The rate per quarter
i = annual rate ÷ 400One instalment
R × (1 + i)^(months left ÷ 3)The maturity amount
M = the sum of every instalment, grown that wayR is the monthly deposit. Months left ÷ 3 is the instalment's time in quarters, which need not be whole. Added up, the sum has a closed form:
The closed form
M = R × ((1 + i)^n − 1) ÷ (1 − (1 + i)^(−1/3))where n is the number of quarters in the tenure.
The interest
Interest = maturity amount − R × instalmentsWorked example
When to use it, and the mistakes to avoid
Use it to see what a recurring deposit will pay at maturity, to compare tenures and rates, and to see what a monthly saving adds up to.
The mistakes that cost the most:
- Expecting FD interest on the total. An RD's money goes in gradually, so it earns less than a lump sum of the same total: about ₹3,59,664 from ₹5,000 a month, against about ₹4,24,433 from ₹3,00,000 in an FD at the same 7%.
- Using simple interest. Simple interest on the same RD comes to ₹53,375, but quarterly compounding makes it about ₹59,664.
- Missing instalments. The figures assume every instalment is paid on time; a late or missed one costs a penalty and lowers the maturity amount.
- Forgetting tax. The interest shown is before tax, and a bank may deduct tax at source.
- Expecting the bank's figure to the rupee. Banks may count days rather than months and round at different points, so their maturity figure can differ by a few rupees.
FAQ
How is RD interest calculated?
Each monthly instalment compounds quarterly for the time it has left until maturity. An instalment with m months to run grows to R × (1 + r/400)^(m/3), where R is the monthly deposit and r the annual rate as a percent. The maturity amount is those added up over every instalment - the method Indian banks publish for recurring deposits.
How much will ₹5,000 a month in an RD at 7% give after 5 years?
About ₹3,59,664. You deposit ₹3,00,000 over the 60 months, so the interest is about ₹59,664. Kept going for 10 years, the same RD reaches about ₹8,68,509.
Why does an RD earn less interest than an FD of the same total?
Because an RD puts the money in a month at a time, so most of it is in the bank for less than the full tenure. ₹3,00,000 in an FD at 7% for 5 years, compounded quarterly, matures at about ₹4,24,433; the same ₹3,00,000 paid in as ₹5,000 a month reaches about ₹3,59,664.
What if the tenure is not a whole number of years?
Enter the extra months as well. ₹5,000 a month at 7% for 5 years and 2 months is 62 instalments, and matures at about ₹3,73,935. The year-by-year table then ends on a part-year row.
What happens if I miss an instalment?
This calculator assumes every instalment is paid on time. Banks usually charge a small penalty for a late instalment, and missed ones lower the maturity amount - check your bank's terms.
Does this include TDS or tax on RD interest?
No. It shows the interest before tax. RD interest is usually taxable and a bank may deduct tax at source, but how much depends on your income and situation, so none is applied here.