RD Calculator
Calculate Recurring Deposit maturity amount and interest earned.
Recurring Deposit Calculator
RD Maturity Details
RD Interest Rates 2026
| Bank | 1 Year | 3 Years | 5 Years |
|---|---|---|---|
| SBI | 6.80% | 6.75% | 6.75% |
| HDFC Bank | 7.00% | 7.00% | 7.00% |
| ICICI Bank | 7.00% | 7.00% | 7.00% |
| Post Office | 6.90% | 7.10% | 7.10% |
Recurring Deposit (RD) Calculator
A Recurring Deposit (RD) is a popular savings instrument offered by banks and post offices in India that allows you to deposit a fixed amount every month for a predetermined tenure. It is an excellent choice for individuals who want to build a disciplined savings habit without committing a lump sum. RD accounts offer guaranteed returns at a fixed interest rate, making them a safe investment option compared to market-linked instruments. The tenure typically ranges from 6 months to 10 years, and the minimum deposit amount varies by bank, usually starting from ₹100 per month.
RD is particularly suitable for salaried individuals, students, and anyone who wants to save a small fixed amount regularly. The interest rate on RD is comparable to Fixed Deposit rates for the same tenure. Most banks offer slightly higher rates for senior citizens. Since RD is a fixed-income instrument, the returns are predictable and not subject to market volatility, making it an ideal choice for conservative investors and short to medium-term financial goals like vacation funds, emergency corpus building, or saving for a down payment.
How RD Interest is Calculated
RD interest is compounded quarterly in most Indian banks. The maturity amount is calculated using the formula:
Maturity = Monthly Deposit × [((1 + r)^n - 1) / r] × (1 + r)
Where r = quarterly interest rate (annual rate ÷ 4), and n = total number of quarters. Each monthly installment earns interest for a different period — the first installment earns interest for the full tenure while the last installment earns interest for only one quarter. This is why RD returns are slightly lower than FD returns for the same principal and rate, as the average investment period is shorter. The total interest earned equals the maturity amount minus the total deposited amount. Our calculator handles all these calculations automatically, giving you accurate results instantly.
RD Interest Rates 2026
RD interest rates are set by individual banks and are revised periodically based on RBI monetary policy, liquidity conditions, and market dynamics. Below are the approximate RD rates offered by major banks and post offices in 2026:
| Institution | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| SBI | 6.80% | 6.75% | 6.75% | 6.75% |
| HDFC Bank | 7.00% | 7.00% | 7.00% | 7.00% |
| ICICI Bank | 7.00% | 7.00% | 7.00% | 7.00% |
| Axis Bank | 7.00% | 7.00% | 7.00% | 7.00% |
| Kotak Mahindra | 7.00% | 7.00% | 6.50% | 6.50% |
| Post Office | 6.90% | 7.00% | 7.10% | 7.10% |
Senior citizens typically get an additional 0.25% to 0.75% over the regular rates. Rates are indicative and may vary; always check with your bank for current rates before investing.
Tax on RD Interest
Interest earned on Recurring Deposit is fully taxable under the head "Income from Other Sources" as per the Income Tax Act. Unlike PPF or ELSS, there is no tax exemption available on RD investments under Section 80C or any other provision. Banks are required to deduct TDS (Tax Deducted at Source) under Section 194A if the total interest earned across all RD and FD deposits exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). The TDS rate is 10% if PAN is provided, and 20% if PAN is not submitted.
If your total income is below the taxable limit, you can submit Form 15G (below 60 years) or Form 15H (senior citizens) to the bank to avoid TDS deduction. However, you must still declare the interest income in your ITR. For those in higher tax brackets, the post-tax returns on RD may be significantly lower. In such cases, considering tax-efficient alternatives like PPF, ELSS mutual funds, or tax-saving FDs may be more beneficial. If you fall in the 20% or 30% tax bracket, use our Income Tax Calculator to estimate the actual post-tax returns from your RD.
FD vs RD vs SIP Comparison
Choosing between FD, RD, and SIP depends on your financial goals, risk appetite, and investment horizon:
| Feature | Fixed Deposit (FD) | Recurring Deposit (RD) | SIP (Mutual Fund) |
|---|---|---|---|
| Investment Type | Lump sum | Monthly installments | Monthly installments |
| Returns | Fixed (6-7.5%) | Fixed (6-7.5%) | Variable (8-15% avg) |
| Risk Level | Very Low | Very Low | Moderate to High |
| Liquidity | Premature withdrawal (penalty) | Premature withdrawal (penalty) | High (after lock-in) |
| Tax Benefit | Tax-saving FD (5yr) under 80C | No tax benefit | ELSS under 80C |
| Best For | Lump sum surplus | Monthly salary earners | Long-term wealth creation |
For conservative investors who prefer guaranteed returns, RD is an excellent monthly savings tool. If you can invest a lump sum, FD may offer slightly better returns. For those with a longer horizon (5+ years) and tolerance for market fluctuations, SIP in equity mutual funds has historically delivered superior inflation-adjusted returns. Many financial advisors recommend a combination: maintain an RD for short-term goals and emergency funds, while using SIPs for long-term wealth creation. Also consider PPF for tax-free guaranteed returns over a 15-year period.