Recurring deposit calculator

A monthly deposit, compounded quarterly

A recurring deposit takes a fixed amount every month and pays a fixed rate, compounded quarterly as most Indian banks do. The calculator gives the maturity value, the interest, what your tax slab leaves you, and the yearly return that works out to on money that went in month by month.

Your numbers

Change anything; the result updates as you type.

Result

A recurring deposit and a SIP are the same habit.

Both put in a fixed amount every month; the difference is what the money is invested in. MindForge publishes the backtest behind each of its three strategies, and the two paid ones trade in their own broker-verified Zerodha accounts.

See the strategies

How RD maturity is calculated

Each monthly deposit earns interest, compounded quarterly, from the month it is made until maturity — the first deposit for the whole tenure, the last for a single month. The maturity value is the sum of every deposit grown on its own.

maturity = Σ deposit × (1 + r/4)^{months remaining ÷ 3}

Why the interest looks small

The money goes in gradually, so on average it is invested for only about half the tenure. ₹10,000 a month for five years at 7% puts in ₹6,00,000 and matures at ₹7,19,328 — ₹1,19,328 of interest, far less than 7% a year on the full ₹6 lakh would suggest, though the rate on each rupee is the full 7%.

What tax leaves you

RD interest is taxed at your slab rate, plus 4% cess, as it accrues. At the 30% slab you keep ₹82,098 of that ₹1,19,328. As a yearly return on each deposit from the month it went in, that is 5.07% after tax, against 7.19% before it.

Assumptions this makes

Deposits at the start of every month, none missed; one fixed rate, compounded quarterly on each deposit from its own month.
Tax at your slab plus 4% cess on all of the interest, no surcharge; the figures total it and do not charge it to the deposit.
Illustration, not a forecast and not investment advice. Some banks round their quarters differently, so a bank’s own figure can differ by a few rupees.

Questions

How is RD interest compounded?

Quarterly, at most Indian banks, and that is what this calculator assumes. Each deposit compounds from its own month, so later deposits earn for less time.

Is RD interest taxable?

Yes, at your slab rate plus cess, in the year it accrues. The bank may deduct TDS, which counts towards the same tax.

What is the post-tax return?

The steady yearly rate that would turn the same monthly deposits into the same post-tax maturity. It is the figure to compare with any other monthly investment, because it accounts for when each rupee went in.

What happens if I miss a month?

Banks usually charge a small penalty on a missed instalment and may close the account after several misses. The calculator assumes every deposit is made on time.

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