RD Calculator

A Recurring Deposit is a bank savings product where you deposit a fixed amount every month for a fixed tenure (typically 6 months to 10 years). At maturity, you receive all your deposits plus compound interest. Most Indian banks compound RD interest quarterly. RDs are DICGC-insured up to ₹5 lakh, making them a safe savings instrument.

Indian banks use quarterly compounding for RDs. Each monthly instalment earns interest from the date of deposit to maturity. The total maturity amount is the sum of each instalment's future value. The standard formula used: M = R × [(1 + i)^n − 1] / (1 − (1 + i)^(−1/3)), where i = quarterly rate and n = total quarters.

Yes. RD interest is fully taxable as 'Income from Other Sources' at your applicable income tax slab. TDS is deducted at 10% if interest across all deposits in a bank exceeds ₹40,000 in a year (₹50,000 for senior citizens). You can submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.

Most banks charge a penalty for missing or late RD payments — typically ₹1–2 per ₹100 per month of delay. If you miss too many instalments (usually 3–6 consecutive months), the bank may close the RD prematurely, paying interest at the applicable premature withdrawal rate.

Yes, premature withdrawal is allowed at most banks, but with a penalty — usually 0.5–1% reduction in the applicable interest rate. Some banks offer loan against RD (up to 80–90% of deposit amount) as an alternative to breaking the RD early.

Both involve regular monthly investments. RD is a bank deposit product — fixed interest rate, guaranteed returns, DICGC-insured, low risk. SIP is a Mutual Fund investment vehicle — market-linked returns, potentially higher over the long term but with market risk. RD suits risk-averse savers with short-term goals; SIP suits investors with a 5+ year horizon and some risk appetite.