Recurring Deposit calculator that uses the real RD formula
Each month's deposit compounds for fewer quarters than the last — most online RD calculators ignore this and over-quote maturity. We model it correctly. Plus step-up RD, senior bonus, SIP comparison, and 9 banks.
Calculate RD Maturity
Enter monthly deposit, RD rate and tenure in months. We compute month-by-month using quarterly compounding (RBI default for RDs).
After 36 months at 7.00% quarterly compounding.
Month-by-month accumulation
Compare RD rates — 9 banks
RD rates typically mirror FD rates of the same tenure. Senior citizens get +0.50% on most. Small finance banks (AU SFB, Bandhan) offer the highest rates but verify DICGC insurance per bank.
| Bank | Regular | Senior | Best Tenure | |
|---|---|---|---|---|
| SBI | 6.80% | 7.30% | 2-3 years | |
| HDFC Bank | 7.00% | 7.50% | 15-24 mo | |
| ICICI Bank | 6.90% | 7.40% | 15 months | |
| Axis Bank | 7.10% | 7.60% | 15-18 mo | |
| Kotak Mahindra | 7.25% | 7.75% | 2 years | |
| Indian Post (POTD) | 6.70% | 6.70% | 5 years | |
| IDFC First | 7.50% | 8.00% | 1-2 years | |
| Bandhan Bank | 7.85% | 8.35% | 1 year | |
| AU Small Finance | 7.75% | 8.25% | 2 years |
Rates revise every quarter. India Post RD has a fixed 5-year tenure but is sovereign-backed (zero credit risk). Bank RDs have flexible tenures (6-120 months). For deposits above ₹5L, split across banks to stay within DICGC insurance limit.
Why most online RD calculators are wrong
An RD is not one deposit — it's 12, 24, 36, or 60 separate deposits, and each one earns interest only for the time remaining until maturity. Lazy calculators apply the FD formula to "average tenure × total deposits" and over-quote by 5-15%.
M = Σ P × (1 + r/4)4 × tk/12
- P — Monthly deposit (constant, or stepped up annually)
- r — Annual interest rate as decimal (7% = 0.07)
- tk — Months remaining for the k-th deposit until maturity
- Compounding is quarterly (RBI default) — that's the 4 in the exponent
Worked example
₹5,000/month for 36 months at 7% quarterly compounding. The 1st deposit compounds for 36 months; the 2nd for 35; ... the 36th for 0 months. Sum across all 36:
Total deposit = 36 × 5,000 = ₹1,80,000
Interest accumulated = ₹21,287
Maturity = ₹2,01,287Effective yield ≈ 11.83% on principal (because money was added gradually, not all upfront — so the simple-yield comparison vs FD is misleading).
RD interest is taxable — same as FD
Many investors believe RD has tax advantages — it doesn't. RD interest is fully taxable as "Income from Other Sources" at your slab rate, and TDS rules are identical to FD.
TDS rules
- Bank deducts 10% TDS if interest in a financial year exceeds ₹40,000 across all your RDs and FDs at that bank (₹50,000 for seniors).
- Aggregation matters — if you have an RD + FD at the same bank, total interest is summed against the threshold.
- No PAN → 20% TDS (don't make this mistake).
Slab tax (most-missed)
- RD interest taxed at your slab. If you're in the 30% bracket, post-tax yield drops from 7% to ~4.9%.
- Pay difference between slab rate and TDS as Self-Assessment Tax before filing ITR.
- Below taxable threshold? Submit Form 15G/15H at the start of FY to avoid TDS.
80TTB shortcut for seniors. Section 80TTB allows up to ₹50,000 deduction on aggregate FD+RD+savings interest — old regime only. Often makes RD interest under that figure effectively tax-free.
RD vs SIP — and the step-up trick
RD gives capital protection and predictable returns (6-8%). SIP in equity funds historically delivers 11-13% over 10+ years but with volatility. The right choice depends on time horizon.
Use RD when
- Goal < 3 years — short-term capital protection (down payment, vacation, exam fees).
- You want forced savings discipline with auto-debit — no temptation to skip.
- Zero risk tolerance — DICGC insurance up to ₹5L per bank.
Use SIP when
- Goal > 5 years — equity volatility smooths out, returns historically beat RD by 4-6% annually.
- Tax efficiency — LTCG on equity funds is 12.5% (above ₹1.25L exemption per year) vs RD interest at 30% slab.
- You're young — compounding magnifies the equity premium over 20+ years.
The step-up RD trick
Start with what you can afford today and increase 10% every 12 months as your salary grows. ₹5,000 monthly RD with 10% annual step-up over 10 years contributes ₹9.56L vs ₹6L flat — and matures at ~₹13L vs ~₹8.6L. Few banks offer a true step-up RD product; instead, open a fresh RD each year for the increased amount and run them in parallel.
Common questions
Is RD interest taxable in India?
Yes. RD interest is fully taxable as "Income from Other Sources" at your slab rate. Banks deduct 10% TDS if total interest in a financial year exceeds ₹40,000 (₹50,000 seniors). Important: this aggregates RD + FD + other deposits at the same bank/branch. You must declare full interest in your ITR even if no TDS was deducted — Income Tax sees it on your AIS.
How is RD interest actually calculated?
Each monthly deposit compounds independently for the time remaining until maturity. The first deposit earns interest for the full tenure; the last earns almost zero. Standard formula sums P × (1 + r/4)^(4×t/12) across all months. Some online calculators use a simplified average-time formula and over-quote maturity by 5-15% — ours uses the correct month-by-month approach.
What is a step-up RD?
A step-up RD increases the monthly deposit annually (typically 10%) to keep pace with salary growth. Few Indian banks offer a true step-up product; the practical trick is to open a fresh RD each year for the increased amount and run them in parallel. Over 10 years, a 10% step-up roughly 1.5x your maturity vs flat RD.
RD vs SIP — which is better?
RD is guaranteed (6-8%) with capital protection. Equity SIP is variable (historically 11-13% over 10+ years) with short-term volatility. For goals under 3 years use RD; for 5+ years SIP usually wins by 30-50%. Tax efficiency also favors SIP — LTCG at 12.5% (₹1.25L annual exemption) vs RD at slab (potentially 30%).
Can I miss an RD installment?
Yes, but most banks charge ₹1-2 per ₹100 of monthly installment as penalty. Six consecutive missed installments may lead to account closure with penalty. Indian Post RD allows 4 missed installments before discontinuation. Best practice: set up auto-debit from your savings account so you never miss accidentally.
Is India Post RD better than bank RD?
India Post 5-year RD currently offers 6.7-7.1% — competitive with banks but not always the highest. Key advantage: sovereign backing (zero credit risk vs DICGC's ₹5L cap at banks). Disadvantage: fixed 5-year tenure (no flexibility), and premature closure after 3 years pays only savings-account rate. Best for risk-averse senior citizens.
Can I take loan against RD?
Yes — most banks offer up to 80-90% of your RD balance as overdraft or loan, at 1-2% above the RD rate. Far better than breaking the RD (which loses interest accrued). Especially useful for short cash crunches without disrupting your savings discipline.
RD or PPF — for long-term goals?
PPF wins. PPF currently pays 7.1% tax-free (RD's 7% post-30%-slab is just 4.9%). PPF has 15-year lock-in but allows partial withdrawals from year 7. RD is taxable, fully liquid, and shorter-tenure. For retirement: PPF + EPF + NPS. For short-term: RD. Don't mix the two.
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Disclaimer: Bank rates listed are typical April 2026 ranges and revise every quarter — always verify on the bank's official website before opening an RD. TDS rules and tax treatment per Income-tax Act, 1961 as amended by Finance Act 2025. This calculator assumes constant rate over tenure; actual returns may vary if your bank revises mid-tenure (RDs typically lock the rate). BillCraft is not a financial advisor and earns no commission from any bank.