Professional recurring deposit analysis with real-time returns projection, tax implications, and comparative investment modeling. Calculate maturity values for systematic savings planning in 2026.
Calculations update in real-time. Results are for financial planning purposes only.
Recurring Deposit (RD) calculations use quarterly compounding interest methodology, which differs from simple interest calculations. The maturity amount is determined using the future value of a series formula, accounting for each monthly deposit's individual compounding period.
The standard RD maturity formula used by Indian banks:
M = R × [(1 + i)ⁿ - 1] × (1 + i) / i
Where:
Scenario: Monthly deposit of ₹10,000 for 5 years (60 months) at 7% annual interest with quarterly compounding.
Calculation:
Unlike fixed deposits where the entire amount compounds from day one, in RDs each monthly deposit compounds separately from its deposit date. The first deposit compounds for the entire tenure, while the last deposit compounds for only one quarter. This staggered compounding is why RD effective returns are slightly lower than equivalent FDs.
| Investment Type | Typical Returns (2026) | Risk Level | Liquidity | Tax Efficiency | Best For |
|---|---|---|---|---|---|
| Recurring Deposit | 5.5% - 7.5% | Very Low | Medium (premature withdrawal penalty) | Low (interest fully taxable) | Systematic savings, short-term goals |
| Fixed Deposit | 6.0% - 8.0% | Very Low | Low (penalty for early withdrawal) | Low (interest fully taxable) | Lump sum investment, emergency fund |
| Debt Mutual Funds | 6.5% - 8.5% | Low to Medium | High (no lock-in) | High (LTCG with indexation) | Medium-term wealth creation |
| Public Provident Fund | 7.1% (2026 rate) | Very Low | Very Low (15-year lock-in) | Very High (EEE status) | Long-term retirement planning |
| Corporate FDs | 7.5% - 9.5% | Medium to High | Low (lock-in period) | Low (interest fully taxable) | Higher returns with higher risk |
| Bank/Institution | General Citizen Rate | Senior Citizen Rate | Minimum Tenure | Minimum Deposit | TDS Threshold |
|---|---|---|---|---|---|
| State Bank of India | 5.8% | 6.3% | 6 months | ₹100 | ₹40,000 |
| HDFC Bank | 6.2% | 6.7% | 6 months | ₹1,000 | ₹40,000 |
| ICICI Bank | 6.0% | 6.5% | 6 months | ₹500 | ₹40,000 |
| Post Office RD | 6.8% | 6.8% | 5 years | ₹100 | ₹40,000 |
| Small Finance Banks | 7.5% - 8.5% | 8.0% - 9.0% | 6 months | ₹100 | ₹40,000 |
HR departments use RD calculators to design systematic savings plans for employees. For instance, a company offering ₹5,000 monthly RD contribution for employees at 7% interest over 5 years results in ₹3.6 lakhs maturity, creating substantial long-term benefits with minimal monthly outlay.
Certified financial planners leverage RD calculations to demonstrate systematic savings discipline to clients. Comparing RD returns against inflation (projected 4.5% in 2026) shows real returns of 1.5-3%, helping clients understand purchasing power preservation.
Parents planning for children's education use RD calculators to determine monthly savings needed. For a ₹10 lakh education goal in 10 years at 7% interest, monthly RD of ₹5,800 is required. This precise calculation enables realistic goal-setting.
RD forms the debt component (10-20%) of retirement portfolios. For a 60-year-old needing ₹50,000 monthly income, ₹30 lakhs in RD at 7% generates ₹1.75 lakhs annual interest, supplementing pension income with minimal risk.
Small businesses use RD for systematic tax-saving while maintaining liquidity. Monthly profits of ₹25,000 deposited in RD at 7% for 5 years create ₹18 lakhs emergency fund while earning better returns than savings accounts.
Explore our comprehensive suite of 200+ financial calculators for complete wealth management:
Calculate FD maturity with senior citizen rates, TDS implications, and premature withdrawal penalties.
Project mutual fund SIP returns with XIRR calculation, goal-based planning, and risk assessment.
Compute Public Provident Fund returns with EEE tax benefits and 15-year projection.
Optimize Section 80C, 80D deductions with RD, ELSS, PPF, and insurance planning.
Advanced compounding with monthly, quarterly, and annual frequency options.
Comprehensive retirement corpus calculation with inflation adjustment and withdrawal strategies.
Calculate loan EMIs with prepayment options, interest savings, and amortization schedules.
National Pension System returns projection with tier-I and tier-II account analysis.
Calculate monthly investment needed for specific financial goals with RD, FD, and mutual funds.
Calculate future value of money and required returns to beat inflation projections.
The RD maturity amount is calculated using the compound interest formula for recurring deposits: M = R × [(1 + i)ⁿ - 1] × (1 + i) / i, where R is monthly deposit, i is quarterly interest rate (annual rate ÷ 4), and n is number of quarters. Each monthly deposit compounds separately from its deposit date until maturity.
RD interest is compounded quarterly but calculated on monthly deposits. Each month's deposit earns interest from the date of deposit until maturity, with compounding occurring every 3 months. For example, a deposit made on January 1st compounds on March 31st, June 30th, etc., while a February 1st deposit compounds on April 30th, July 31st, etc.
RD interest is fully taxable under 'Income from Other Sources' in the financial year it accrues. Banks deduct TDS at 10% if interest exceeds ₹40,000 annually (₹50,000 for senior citizens). For non-PAN holders, TDS is 20%. The interest income is added to your total income and taxed as per your slab rate. There's no tax deduction for the principal amount invested.
Yes, but premature withdrawals typically incur penalties of 0.5-1% on the interest rate, and some banks may not allow withdrawals before 3 months. The interest is recalculated at the rate applicable for the period the deposit was held or the contracted rate minus penalty, whichever is lower. Some banks offer loan against RD as an alternative to breaking it.
FD requires a lump sum deposit with fixed tenure, while RD involves regular monthly deposits. FDs generally offer higher rates for lump sums, but RDs enforce systematic savings discipline. Interest calculation differs: FD compounds on the entire amount from day one, while RD compounds each deposit separately. FD typically offers better returns for equivalent amounts, but RD helps inculcate savings habits.
As of 2026, leading banks like SBI, HDFC, and ICICI offer 5.5-7% for general citizens, while small finance banks offer 7.5-8.5%. Post Office RD offers 6.8% with sovereign guarantee. Senior citizens get 0.5% extra. Digital banks like AU Small Finance Bank and Equitas Small Finance Bank offer competitive rates up to 8.25% for regular RDs and 8.75% for senior citizens.
RDs offer guaranteed returns (5.5-8.5%) with capital protection, while SIPs in equity mutual funds offer potentially higher returns (10-15% historically) with market risk. RDs have fixed tenure and predictable returns, suitable for risk-averse investors with short-term goals (1-5 years). SIPs are better for long-term goals (5+ years) where investors can withstand volatility for higher returns.