How is RD interest calculated?

In India, banks calculate RD interest using the quarterly compounding formula. The formula is complex because each monthly instalment earns interest for a different duration (e.g., first instalment for N months, last for 1 month). Our calculator handles this accurately.

Is RD interest taxable?

Yes, interest earned on RD is fully taxable as per your income tax slab. TDS (Tax Deducted at Source) is deducted by banks if interest exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year.

Can I prematurely withdraw RD?

Yes, most banks allow premature withdrawal but may charge a penalty (usually 1% lower interest rate than applicable for the period the deposit remained with the bank).

RD vs SIP - which is better?

RD offers guaranteed, safe returns (approx 6-7%) and is ideal for risk-averse investors. SIP (in Equity Mutual Funds) offers market-linked returns (historically 12-15%) but carries higher risk. For long-term goals (>5 years), SIP typically beats RD.

RD Calculator

Calculate the maturity value of your Recurring Deposit (RD) with our accurate calculator. Uses quarterly compounding logic followed by SBI, HDFC, ICICI, and other Indian banks.

What is a Recurring Deposit?

A Recurring Deposit (RD) is a special kind of Term Deposit offered by banks which helps people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.

Key Features

Disciplined Savings: Helps in building a habit of saving small amounts monthly.
Guaranteed Returns: Interest rates are fixed for the entire tenure.
Flexible Tenure: Usually ranges from 6 months to 10 years.
Loan Facility: You can avail a loan against your RD corpus.

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