How is interest on an RD calculated?

Interest on a Recurring Deposit is typically compounded quarterly. This means that every three months, the interest earned is added to the principal, and the next quarter's interest is calculated on this new, larger amount. This compounding effect helps your money grow faster than simple interest.

What happens if I miss an RD payment?

Most banks levy a small penalty if you miss a monthly RD installment. The penalty amount varies from bank to bank. If you miss several consecutive payments, the bank may close the account prematurely.

Is the interest earned from an RD taxable?

Yes, the interest earned on a Recurring Deposit is taxable in India. It is added to your 'Income from Other Sources' and taxed as per your applicable income tax slab. Banks are also required to deduct TDS (Tax Deducted at Source) if the interest income in a financial year exceeds a certain limit.

RD Calculator

Calculate the maturity amount and interest earned on your Recurring Deposit.

Investment Details

Monthly Investment₹5,000

Interest Rate (% p.a.)6.50%

Time Period (Years)5 Years

Maturity Value

₹3,54,954

Invested Amount:₹3,00,000

Interest Earned:₹54,954

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About the RD Calculator

Learn about Recurring Deposits and how they help in disciplined savings.

What is a Recurring Deposit (RD)?

A Recurring Deposit (RD) is a special kind of term deposit offered by banks and post offices in India. It is an investment tool that allows people with regular incomes to deposit a fixed amount every month into their RD account and earn interest at the rate applicable to Fixed Deposits. It's an ideal choice for individuals who want to build a savings habit and create a corpus over time without having to invest a large lump sum at once.

How to Use This Calculator

This calculator helps you determine the maturity value of your RD investment. Simply use the sliders to set your 'Monthly Investment', the expected annual 'Interest Rate', and the 'Time Period' in years. The calculator automatically computes the total amount you will have invested over the tenure, the total interest you will earn, and the final maturity value. This allows you to easily plan for your financial goals, whether it's saving for a vacation, a gadget, or a down payment.

Frequently Asked Questions

Practical Applications

An RD is an excellent tool for disciplined savings. This calculator helps you see how your money can grow, which is useful for:

Short-Term Goal Planning: Plan for goals like a vacation, a down payment for a car, or buying a new gadget by seeing how much you can accumulate over a specific period.
Building a Savings Habit: For beginners in investment, an RD is a great way to start a habit of regular saving. This calculator can motivate you by showing the potential returns.
Safe, Guaranteed Returns: Unlike market-linked investments, RDs offer a fixed interest rate. This calculator helps you understand the exact returns you'll get on your safe investment.
Emergency Fund: You can plan to build an emergency fund over a few years by starting an RD.

Note: The formula used provides an estimate. Actual maturity amounts may vary slightly based on the bank's specific calculation method.