RD Calculator

A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a set period (6 months to 10 years) and earn compound interest calculated quarterly. Unlike FDs which require a lump sum, RDs are ideal for salaried individuals. At maturity you receive your total deposits plus accumulated interest, with returns as safe and guaranteed as a fixed deposit.

RD requires fixed monthly deposits while FD requires a one-time lump sum. RD suits regular savers; FD suits investors with available capital. RD interest is slightly lower than FD for the same amount and tenure because each monthly deposit earns interest for a shorter period. Both are equally safe and offer guaranteed returns, but serve different financial needs.

Most banks require a minimum of ₹100–₹500 per month; Post Office RD starts at ₹100/month. There is no upper limit in most banks. Tenure ranges from 6 months to 10 years (120 months). Senior citizens typically get 0.5% extra interest. NRIs can open RD accounts but at slightly lower rates than resident Indians.

Yes, but with a penalty of 0.5–1% on earned interest. Most banks require a minimum tenure (typically 3–6 months) before allowing premature closure. A better alternative is taking a loan against the RD (85–90% of RD value) at 1–2% above the RD rate, which avoids closing the deposit and retains the full interest benefit.

Missing an installment incurs a late penalty (typically ₹1–₹5 per ₹100 per month). Most banks provide a 1–2 month grace period. Repeated defaults may cause the account to be discontinued or prematurely closed. Set up auto-debit from your savings account and maintain sufficient balance to avoid missing payments.

Yes, RD interest is fully taxable as 'Income from Other Sources' per your income tax slab. Banks deduct TDS at 10% if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G or 15H to avoid TDS if your total income is below the taxable limit. Only the 5-year Post Office RD qualifies for Section 80C deduction.

Small Finance Banks (Ujjivan, Equitas, Jana) typically offer the highest RD rates at 7–8.5%. Post Office RD offers ~6.7% with government backing. Private banks offer 6–7.5% and public sector banks 5.5–7%. When choosing, balance the interest rate with the bank's safety and reputation — don't prioritise rate alone for large deposits.

Yes, you can open multiple RD accounts at the same or different banks without restrictions. Common strategies include laddering — opening a new RD every few months so accounts mature regularly, providing ongoing liquidity — or using separate RDs for different financial goals. Ensure your monthly cash flow can sustain all RD instalments simultaneously.

RD offers guaranteed 6–8% returns with zero market risk, making it ideal for short-term goals (1–3 years) and emergency funds. SIP in equity mutual funds has historically delivered 10–15% over the long term but carries market risk. The ideal strategy is to use both: RD for near-term, safety-first goals and SIP for long-term wealth creation.

Post Office RD is 100% government-backed with a fixed ~6.7% rate, ₹100/month minimum, 5-year tenure, and 80C tax deduction on the investment (not interest). Bank RDs offer flexible tenures (6 months to 10 years), variable rates (5.5–8.5%), better online facilities, and easier loan against RD. Choose Post Office for maximum safety and tax benefit; choose banks for flexibility and potentially higher rates.

No, the monthly RD amount is fixed at account opening and cannot be changed during the tenure. If you want to save more, open an additional RD account. If you need to save less, you would have to close the existing RD with a premature closure penalty and open a new one. Start with a conservative amount you can reliably maintain every month.