How an RD differs from a fixed deposit
A recurring deposit (RD) is a fixed deposit built one monthly instalment at a time instead of one lump sum up front — useful when you have steady monthly income but not a large amount to park all at once. Like an FD, the rate is fixed and guaranteed by the bank for the whole tenure; unlike an FD, each month's deposit compounds for a different length of time, since it joins the pot later.
How this is calculated
This calculator uses the standard monthly-compounding annuity formula on your fixed bank rate — the same structure as a SIP calculator, but with a rate the bank guarantees rather than one you're assuming:
FV = P × [((1 + i)n − 1) ÷ i] × (1 + i)
Some banks compound RD interest quarterly rather than monthly, which can produce a slightly different maturity figure than shown here — check your specific RD's terms for the exact convention.
Frequently asked questions
Is RD interest taxable?
Yes, the same as FD interest — fully taxable at your slab rate, with TDS deducted by the bank once interest crosses the annual threshold.
Can I withdraw an RD early?
Most banks allow premature closure, usually with a penalty (commonly a reduction in the interest rate applied). Missing a monthly instalment can also attract a small penalty depending on the bank.
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