RD Calculator

Indian banks calculate RD maturity using a quarterly-compounding formula, since RD interest is compounded quarterly even though you deposit monthly. Let i = r ÷ 400 (the quarterly rate as a decimal) and n = tenure in months ÷ 3 (the number of quarters, which can be fractional). Then:

Maturity Value M = R × [ ((1 + i)ⁿ − 1) ÷ (1 − (1 + i)^−1/3) ], where R is your fixed monthly installment. Total Deposited = R × tenure in months, and Interest Earned = M − Total Deposited.

How RD differs from FD: a Fixed Deposit involves depositing one lump sum upfront that then compounds for the whole tenure. A Recurring Deposit instead involves depositing a fixed, smaller amount every month, and each individual installment earns interest only for the time it has been in the account — the first installment earns interest for the full tenure, while the last installment earns interest for only about one compounding period. The formula above accounts for this by summing the compounded value of every monthly installment.

Worked example: deposit ₹5,000 every month at 7% annual interest for 12 months. Here i = 7 ÷ 400 = 0.0175 and n = 12 ÷ 3 = 4 quarters. Working through the formula gives a maturity value of approximately ₹62,311. You deposited a Total of ₹5,000 × 12 = ₹60,000, so your Interest Earned is approximately ₹2,311 over the year.

Who RD suits vs. who FD suits: an RD is built for salaried individuals and regular savers who want to build a savings habit by setting aside a fixed amount every month rather than committing a large sum at once. An FD suits people who already have a lump sum — a bonus, maturity payout or inheritance, for example — sitting idle and want it to earn a guaranteed return without further monthly commitment.