Deposit ₹10,000/month for 5 years at 7% (quarterly compounding). Maturity = ₹7,16,070 on total deposits of ₹6,00,000. Interest earned = ₹1,16,070. After 30% tax on interest: effective maturity = ₹6,81,249. At 6% inflation, this has purchasing power of only ₹5,09,000 — barely above the ₹6 lakh you deposited. For inflation-beating returns, explore equity SIP at 12% which would grow to ₹8.17 lakh on the same ₹6 lakh investment.
A Recurring Deposit (RD) is a fixed-income savings instrument offered by banks and post offices in India where you deposit a fixed amount every month for a chosen tenure. Interest is compounded quarterly and paid at maturity. This RD Calculator India computes the exact maturity value using quarterly compounding, and — unlike most RD calculators — shows the post-tax return and inflation-adjusted real return, revealing whether your savings are actually growing in purchasing power or quietly losing value.
The inflation connection is the key insight for RD investors: at 7% RD rate, 30% tax slab, and 6% inflation, your post-tax real return is approximately -1%. This means your RD savings are losing purchasing power every year. While RD is excellent for short-term capital safety and building savings discipline, it should not be your primary wealth-building instrument. Compare with our FD Calculator, PPF Calculator (tax-free), and SIP Calculator (market-linked) for better long-term alternatives.
Where P is the monthly instalment, i is (annual rate / 400), and n is the number of quarters. Each monthly deposit earns compound interest for the remaining tenure of the RD.
| Monthly Deposit | 1 Year (7%) | 3 Years (7%) | 5 Years (7%) | 10 Years (7%) |
|---|---|---|---|---|
| ₹5,000 | ₹62,100 | ₹1,99,500 | ₹3,58,000 | ₹8,65,000 |
| ₹10,000 | ₹1,24,200 | ₹3,99,000 | ₹7,16,000 | ₹17,30,000 |
| ₹15,000 | ₹1,86,300 | ₹5,98,500 | ₹10,74,000 | ₹25,95,000 |
| ₹25,000 | ₹3,10,500 | ₹9,97,500 | ₹17,90,000 | ₹43,25,000 |
| ₹50,000 | ₹6,21,000 | ₹19,95,000 | ₹35,80,000 | ₹86,50,000 |
| Bank / Institution | 1 Year | 2-3 Years | 5 Years | Senior Citizen Extra |
|---|---|---|---|---|
| SBI | 6.80% | 7.00% | 6.50% | +0.50% |
| HDFC Bank | 6.60% | 7.10% | 7.00% | +0.50% |
| ICICI Bank | 6.70% | 7.00% | 7.00% | +0.50% |
| Post Office RD | — | — | 6.70% | No extra |
| Bajaj Finance | 7.40% | 7.80% | 7.50% | +0.25% |
Rates are indicative and subject to change. Post Office RD rates are set by the government quarterly. NBFCs like Bajaj Finance often offer higher rates but with marginally higher risk compared to PSU banks. TDS at 10% applies if total interest exceeds ₹50,000 per year (₹1 lakh for senior citizens). For tax-saving alternatives, see our NSC Calculator (Section 80C eligible) and Tax Savings Calculator.
| Feature | RD | Equity SIP | FD | PPF |
|---|---|---|---|---|
| Return Rate | 6.5-7.5% | 12-15% (historic) | 6.5-7.5% | 7.1% (tax-free) |
| Compounding | Quarterly | Daily (NAV-based) | Quarterly | Annual |
| Tax on Returns | Slab rate (up to 30%) | LTCG 12.5% above ₹1.25L | Slab rate (up to 30%) | Fully tax-free (EEE) |
| Post-Tax Return (30% slab) | ~4.9% | ~11-13% | ~4.9% | 7.1% (tax-free) |
| Real Return (6% inf) | -1.04% | +5-7% | -1.04% | +1.04% |
| Risk | Zero | Market risk (high) | Zero | Zero |
| Lock-in | 6mo-10yr | None (ELSS 3yr) | 7 days-10yr | 15 years |
| SEBI/RBI Regulated | RBI | SEBI | RBI | Government |
| Best For | Short-term savings | Long-term wealth | Lump sum parking | Tax-free debt growth |
The real return column tells the full story: RD and FD actually lose purchasing power for 30% slab investors, while PPF barely beats inflation and equity SIP delivers meaningful 5-7% real growth. Use our SIP Calculator, FD Calculator, PPF Calculator, and Mutual Fund Calculator for detailed comparisons. Track inflation with our Inflation Calculator, Purchasing Power Calculator, and CAGR Calculator for return analysis. For retirement-focused saving, explore our EPF Calculator, NPS Calculator, and Pension Calculator.
RD (Recurring Deposit) interest in India is compounded quarterly by most banks and post offices. Each monthly instalment earns compound interest for the remaining tenure of the deposit. The formula is: M = P x [(1+i)^n - 1] / [1 - (1+i)^(-1/3)], where M is maturity value, P is monthly instalment, i is rate/400 (quarterly rate), and n is number of quarters. For example, ₹10,000 per month at 7% for 3 years (12 quarters): the maturity value is approximately ₹3,98,900 on total deposits of ₹3,60,000, earning ₹38,900 in interest.
RD interest rates in India in 2025-26 vary by institution: SBI offers 6.5-7.0% depending on tenure, HDFC Bank 6.6-7.1%, ICICI Bank 6.5-7.0%, Post Office RD 6.7% (for 5-year tenure). Senior citizens get an additional 0.25-0.50% at most banks. Rates are fixed at the time of opening and remain constant for the entire tenure regardless of subsequent rate changes. The best rates are typically offered for 1-2 year tenures. Post Office RD rates are revised quarterly by the government.
Yes, RD interest is fully taxable in India. Interest earned is classified as Income from Other Sources and taxed at your applicable income tax slab rate. TDS (Tax Deducted at Source) at 10% is applicable if total interest across all RDs and FDs with a bank exceeds ₹50,000 per financial year (₹1 lakh for senior citizens, as per Budget 2025). If PAN is not furnished, TDS rate increases to 20%. RD investments do not qualify for Section 80C tax deduction. You can submit Form 15G (below 60) or Form 15H (senior citizens) to avoid TDS if your total income is below the taxable threshold.
RD is better for building savings through monthly discipline when you don't have a lumpsum to invest. FD is better when you have a lump sum available, as it typically earns slightly higher interest (0.1-0.3% more). Both compound quarterly. Key differences: RD requires fixed monthly deposits while FD needs a one-time deposit. RD builds the habit of regular saving while FD locks in a larger amount immediately. Tax treatment is identical — both are fully taxable. For the same interest rate and tenure, an FD on a lump sum will earn more total interest than an RD because the full amount compounds from day one. Compare using our FD Calculator.
SIP in equity mutual funds significantly outperforms RD over long periods. SIP has historically delivered 12-15% CAGR over 10+ years, while RD offers 6.5-7.5%. On ₹10,000 monthly for 10 years: RD at 7% yields approximately ₹17.3 lakh, while SIP at 12% yields approximately ₹23.2 lakh — a difference of ₹5.9 lakh. However, SIP carries market risk while RD guarantees capital and returns. After tax, the gap widens further: RD interest is taxed at slab rate (up to 30%), while equity SIP LTCG is only 12.5% above ₹1.25 lakh. RD is suitable for short-term goals (1-3 years); SIP is better for long-term wealth creation.
RD tenure typically ranges from 6 months to 10 years at most banks, extendable in 3-month increments. Post Office RD has a fixed 5-year tenure (with option to extend for another 5 years). HDFC Bank offers 6 months to 10 years, SBI offers 1 year to 10 years, and ICICI Bank offers 6 months to 10 years. The minimum monthly deposit is ₹100-1,000 depending on the bank (₹100 at Post Office, ₹1,000 at most private banks). There is no maximum limit for most banks — HDFC Bank allows up to ₹1.99 crore per month. Premature withdrawal is allowed with a penalty of 0.5-1% reduction in interest rate.
At the current average RD rate of 7% and CPI inflation of 6%, the real return is approximately 0.94% per year. After 30% income tax on interest, the effective rate drops to 4.9%, giving a negative real return of -1.04%. This means your RD savings are actually losing purchasing power over time. For example, ₹10,000/month RD for 5 years at 7% yields ₹7.16 lakh in maturity. But at 6% inflation, the purchasing power of ₹7.16 lakh is only ₹5.35 lakh in today's money — barely more than the ₹6 lakh you deposited. RD should be used only for short-term safety goals, not long-term wealth building.
Yes, most banks offer loans against RD at 1-2% above the RD interest rate. You can typically borrow up to 80-90% of the RD balance without breaking the deposit. This preserves your savings discipline while providing emergency liquidity. The loan interest is charged only for the borrowed period, and your RD continues earning interest normally. This is often a better option than premature withdrawal, which involves a penalty of 0.5-1% reduction in interest rate plus loss of compounding on the withdrawn amount. Some banks also allow partial withdrawal from RD after 6 months of opening.
Disclaimer: RD interest rates vary by bank, tenure, and deposit amount. Rates shown are indicative for FY 2025-26 and subject to change. Interest is taxable at your applicable income tax slab rate. TDS applies per RBI rules. This calculator is for financial planning purposes only — verify rates with your bank before investing. Consult a SEBI-registered financial advisor for personalized advice.