Recurring Deposit
What your monthly instalments mature into, how much of it you deposited yourself, and why the same rate pays less on an RD than on an FD.
Compute your RD maturity live · nothing leaves the page
§1The formula
An RD is a bundle of tiny FDs. Each monthly instalment is locked in from the day you pay it until maturity, compounding quarterly — the Indian bank standard — for however long it has left:
The first instalment compounds for the full term; the last one for barely a month. This calculator runs that sum instalment by instalment, so the result matches what banks quote.
A lumpsum FD of ₹3 lakh at the same 6.5% for 5 years would earn about ₹1.14 lakh — nearly double. Not because the RD is worse-priced, but because your money arrives gradually and the average rupee only compounds for about half the term.
§2The gotchas
RD interest is taxed at your slab rate like FD interest, and since 2015 banks deduct 10% TDS on it too, once your total interest at that bank crosses ₹40,000 a year (₹50,000 for seniors). TDS is only a prepayment — the 30% slab owes the rest at filing. File Form 15G/15H if your income is below the taxable limit.
Skip a month and you pay a default fee — the post office charges ₹1 per ₹100 per month delayed, and banks levy similar small penalties or shave the payable interest. Miss four consecutive instalments at the post office and the account is discontinued; you then have a limited window to revive it. Set a standing instruction for the day after salary lands.
Banks price RDs off the same card as FDs, but the effective return on your total outlay is lower: later instalments simply have less time to compound. That's not a flaw — an RD is an FD for money you don't have yet. If you already hold the lumpsum, book the FD; use the RD to force discipline on future income.
§3Related
Already have the lumpsum? Compare with the fixed deposit calculator. Willing to take market risk for a higher expected return? See the SIP calculator.