RD Calculator

What is This Calculator?

Recurring Deposit (RD) is the perfect tool for building a savings habit - invest a fixed amount monthly, just like a SIP, but with guaranteed returns and zero risk. RDs are ideal for people who don't have a lump sum to invest but can save regularly from their salary. Whether you're saving ₹1,000 or ₹10,000 monthly, RDs help you build a corpus for short to medium-term goals - vacation, gadget purchase, festival shopping, or building an emergency fund. This calculator shows you exactly how much your monthly savings will grow to, making it easier to set concrete savings goals. The discipline of monthly saving combined with guaranteed returns makes RD a favorite among first-time savers and conservative investors.

How to Use This RD Calculator

Enter your monthly deposit amount - the fixed sum you'll invest every month. Choose the interest rate your bank is offering; RD rates are usually similar to FD rates of the same tenure, typically 6-7.5%. Senior citizens get 0.5% extra. Select your tenure - RDs typically run for 6 months to 10 years. The calculator instantly shows your maturity amount and total interest earned. Try different scenarios: What if you save ₹2,000 instead of ₹1,000? What happens if you extend from 3 years to 5 years? Small increases in monthly amount or tenure can significantly boost your maturity value. Unlike SIP where returns fluctuate, RD gives you certainty - you know exactly what you'll get.

Understanding Your Results

Your maturity value is your total deposits plus interest earned through compounding. Interest is calculated quarterly on the balance. The results also show your total investment versus interest earned - the ratio improves with longer tenure due to compounding. RD interest is taxable, just like FDs, and TDS applies if interest exceeds ₹40,000 in a year. RDs offer great liquidity - you can take a loan against your RD (usually 90% of balance) without breaking it. Premature withdrawal is allowed with small penalties. Use RDs for goals 1-5 years away where you need certainty and can't afford market risk. For goals beyond 5 years, SIP in equity mutual funds might offer better returns despite the risk.

Real-Life Example

Suresh, 28, decides to save for a bike down payment. He starts a 3-year RD with ₹5,000 monthly deposit at 7% interest. After 36 months, he invests ₹1.8 lakhs and receives ₹2.02 lakhs at maturity - ₹22,000 in interest. This covers his ₹2 lakh down payment perfectly. The monthly deduction from his salary happened automatically, so he never had to remember to invest. His colleague Deepak tried to save informally but kept dipping into his savings for small expenses - after 3 years, he had only ₹1.2 lakhs. Suresh's RD enforced discipline and paid interest on top. He now starts a new ₹3,000 monthly RD for his annual vacation fund. Small, consistent saving adds up faster than you think when you use the right tools.

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Frequently Asked Questions