In short
A recurring deposit (RD) lets you save the same amount every month at a fixed rate, and pays it all back with interest at the end of the term. This calculator shows the maturity value and how the balance builds up each year.
How recurring deposit interest works
Each monthly deposit earns interest from the month it is paid until the end of the term, compounded at the bank's frequency, usually quarterly. The first deposit earns the most interest and the last one the least.
For quarterly compounding banks use: M = R × ((1 + i)^n − 1) / (1 − (1 + i)^(−1/3)), where R is the monthly deposit, i the quarterly rate (annual rate ÷ 4) and n the number of quarters.
Worked example
Save 500 a month at 7% for 5 years. You deposit 30,000 in total and receive 35,966.40 at maturity: 5,966.40 of interest.
In rupees, 5,000 a month at 7% for 5 years matures at ₹3,59,663.95.
RD or SIP?
A recurring deposit gives a guaranteed, fixed return. A monthly investment in funds (a SIP) can earn more over long periods but its value goes up and down. Use the investment calculator to compare the two.
Frequently asked questions
When is each deposit made?
At the start of each month, as with most bank RDs, so each deposit earns interest for the whole month it is paid in.
What happens if I miss a payment?
Banks usually charge a small penalty and some close the account after several missed payments. The calculator assumes every payment is made on time.
Can I enter a term in months?
Yes, as a fraction of a year: 6 months is 0.5 and 18 months is 1.5 years. Terms are counted in whole months.
Is RD interest taxed?
In many countries, yes, like other interest. The calculator shows interest before tax.
Methodology
Deposits are made at the start of every month and the equivalent monthly rate (1 + r/m)^(m/12) − 1 is applied each month. For quarterly compounding this reproduces the published formula M = R × ((1 + i)^n − 1) / (1 − (1 + i)^(−1/3)). Values are rounded for display only.
This calculator gives estimates for information only and is not financial advice. Your bank's rate, terms and taxes apply.
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