RD Calculator

Building savings with a recurring deposit

A recurring deposit suits people who want to save a fixed amount every month with no market risk. Each instalment earns interest only for the months that remain until maturity, so the first deposit earns the most and the last earns very little. That is why the maturity amount looks smaller than you might expect if you simply multiply the rate by the total deposited.

As an example, ₹5,000 a month for five years at 7% means you deposit ₹3 lakh, and the account matures at roughly ₹3.6 lakh with quarterly compounding. The calculator shows how much of that is interest, which helps you compare an RD against other options for the same goal, such as a SIP in a debt fund or a series of fixed deposits.

An RD works well for short and medium goals with a known date, like a holiday, a gadget or school fees next year. Set the instalment on the same day as your salary so it happens automatically. Missing payments usually leads to a small penalty, and repeated misses can cause the bank to close the account, so pick an amount you can keep up comfortably. Like FD interest, RD interest is taxable at your slab rate, and TDS can apply, so a high earner's real return is lower than the headline rate. If inflation is running close to the RD rate, the deposit protects your money but will not grow its purchasing power much. Comparing the RD maturity here with an FD calculation for the same goal often shows which option suits your cash flow better.