A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a chosen tenure, with interest compounded quarterly. The maturity amount at the end is the sum of all deposits plus accrued compound interest.
What is RD?
RD is the SIP-like cousin of FD. Instead of locking a lump sum, you commit to a fixed monthly deposit for a tenure (usually 6 months to 10 years). Interest accrues quarterly, like a regular FD, but on the slowly-growing balance — each month's deposit gets less time to compound than the previous one.
It is popular for salaried people who want forced savings. The bank auto-debits a fixed amount monthly. Unlike a SIP into a mutual fund, the rate is fixed at the start and there is no market risk.
Returns are similar to FDs of the same tenure (6.5%-7.5% in 2026 for general citizens). Senior citizens get 0.5%-0.75% extra. Interest is fully taxable at slab rate.
RD maturity math
Each monthly installment compounds at the bank's quarterly rate for the remaining time in the RD. The maturity amount is the sum of all 12n installments after compounding.
- P
- Monthly deposit—the fixed amount you deposit each month
- r
- Quarterly rate—annual rate / 4 / 100
- n
- Total months—tenure × 12
How to use this calculator
Three inputs: monthly amount, rate, tenure in months.
Enter monthly deposit
Most banks accept ₹100 to any amount.
Enter rate
Use the rate quoted by your bank for RD at this tenure.
Enter tenure in months
Common: 12, 24, 36, 60, 120 months.
When an RD makes sense
Forced monthly savings
Auto-debit means you save before spending. Useful if discipline is the limiting factor.
Saving for a 1-3 year goal
Wedding, vehicle, vacation — RD locks in today's rate for the full tenure.
Conservative income
Predictable monthly contribution, predictable maturity. No market risk.
Common mistakes to avoid
Skipping a monthly deposit
Banks usually charge a small penalty (₹10-50). Set up auto-debit to avoid lapses.
Choosing a long tenure when goal is short
RD lock-in is strict. Match tenure to your goal date precisely.
Glossary
- Recurring Deposit
- Fixed monthly deposits with quarterly compounded interest, locked for a tenure.
- Maturity amount
- Total payout at end of tenure — sum of deposits plus interest.
- Premature withdrawal
- Breaking the RD early. Bank deducts interest at a lower rate.