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ToolBoxGenie

RD Calculator

Calculators · Added 14 August 2026

A recurring deposit takes a fixed amount every month and pays a fixed rate on each instalment for however long it stays in the account. This calculator adds up all of those separate compounding periods to give the maturity value, and shows why the interest is always less than the headline rate applied to the total.

%

The rate quoted for this exact term.

How to use the rd calculator

  1. 1Enter the amount you will deposit each month.
  2. 2Enter the rate quoted for the exact term — RD rates vary by tenure in the same way fixed deposit rates do.
  3. 3Set the term, in months or years.
  4. 4Press Calculate to see the maturity amount and the interest earned.
  5. 5Read the method note under the result: it states exactly how each instalment is compounded, so the figure can be checked rather than trusted.

Examples

A one-year recurring deposit

Input
₹5,000 a month at 7% for 12 months
Result
About ₹62,311 — ₹60,000 deposited and roughly ₹2,311 of interest

The interest is well under 7% of ₹60,000, because the twelfth instalment has only been in the account for a month.

A five-year recurring deposit

Input
₹2,000 a month at 6.5% for 5 years
Result
₹1,41,982 — ₹1,20,000 deposited and ₹21,982 of interest

Over a longer term the early instalments have time to compound, so the effective return on the total deposited rises.

Why an RD pays less than an FD

Input
₹60,000 as a lump-sum FD versus ₹5,000 a month for 12 months, both at 7%
Result
₹4,312 of interest versus ₹2,311

Same money, same rate, nearly half the interest — the FD had the whole amount working from day one.

About the rd calculator

The arithmetic that surprises people

A recurring deposit is n separate deposits that happen to share a rate and an account number. Instalment one compounds for the whole term, instalment two for one month less, and so on down to the final instalment which earns interest for a single month. The maturity value is the sum of all of those, which is why there is no single clean multiplication that produces it.

The consequence is that the headline rate overstates what you will feel. At 7% over twelve months, the interest works out to roughly 3.8% of the total deposited — not because the bank is paying less than it said, but because on average your money has only been there for half the term. Every recurring-deposit product has this property, and it is not a criticism of any particular one.

This also explains why a recurring deposit improves with length. Over five years, the early instalments have enough time to compound meaningfully, and the gap between the quoted rate and the effective return on total deposits narrows considerably. Short recurring deposits are mostly a savings discipline with a small yield attached.

What it is actually good for

The honest case for a recurring deposit is not the return. It is that it converts an intention into a standing instruction. Money that leaves the account automatically on the 5th is money that was never available to spend on the 6th, and for a great many people that mechanism is worth more than the difference between one product's rate and another's.

It also suits a specific shape of goal: a known amount needed on a known date, funded out of monthly income rather than a lump sum you already hold. Insurance premiums, annual fees, a planned trip. The maturity value is contractual, so the plan either works or it visibly does not, well before the date arrives.

Where it fits badly is long-horizon growth. Locking a monthly contribution into a fixed nominal rate for fifteen years hands the entire inflation risk to you, with no upside if prices or wages rise faster than expected. Interest is taxable as income as well, which bites hardest at exactly the higher slabs where people have the most to save.

Frequently asked questions

Why is the interest so much less than the rate times the total?
Because the total was never in the account for the whole term. On a twelve-month RD, the first instalment earns for twelve months and the last earns for one; the average instalment is invested for roughly half the term. That is why a 7% RD over a year produces something closer to 3.8% of the total deposited, and it is the single most common surprise with this product.
How exactly does this calculator compound?
Each instalment is treated as its own deposit, compounding quarterly for the number of months it is actually in the account — the first for the full term, the last for one month. Indian recurring deposits compound quarterly by convention, which is why the exponent is measured in quarters. This is stated under every result so the figure can be reproduced by hand.
Why does my bank's figure differ by a few rupees?
Banks differ on how they treat a part-quarter at the end. Some compound it as this calculator does; others pay simple interest for the final stub period, which produces a slightly lower number. The gap is typically well under a tenth of a percent. Take your bank's own maturity advice as authoritative and this as a close estimate.
What happens if I miss an instalment?
Most banks charge a small penalty per missed instalment and may close the account after several consecutive misses, converting it to a lower rate. The calculator assumes every instalment is paid on time. If you expect to miss some, the maturity value will be lower than shown by more than just the missing deposits.
Is an RD better than a SIP?
They answer different questions. An RD gives a contractually fixed maturity value with no market risk; a SIP into a market-linked fund has a higher expected return and no guarantee whatsoever. For a known expense on a known date, the certainty of an RD is the point. For a goal a decade away, giving up growth to eliminate short-term variability is usually the more expensive choice.

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