The RD Calculator (Recurring Deposit) is a powerful savings tool for individuals who want to build a corpus through disciplined monthly contributions without the risk of market volatility. Unlike a Fixed Deposit (FD) which requires a large lumpsum, an RD allows you to start with as little as ₹100 or ₹500 per month. This makes it ideal for short-term goals like a domestic vacation, buying a gadget, or creating an emergency fund. Our tool handles complex quarterly compounding math to show exactly how much interest your monthly plan will earn.
What is a Recurring Deposit (RD)?
A Recurring Deposit is a term deposit offered by Indian banks and the Post Office where a fixed amount is deposited every month for a pre-defined tenure (6 months to 10 years). The interest rate is fixed at the start and remains unchanged, offering guaranteed returns. It is often described as the 'risk-free sister' of a Systematic Investment Plan (SIP).
RD vs SIP — Which is Better For You?
While both involve monthly contributions, they serve very different purposes in your portfolio:
| Feature | Recurring Deposit (RD) | SIP (Mutual Funds) |
|---|---|---|
| Returns | Guaranteed (Fixed) | Market Linked (Variable) |
| Risk | Zero (Bank/Govt) | Medium to High |
| Taxation | Taxable per slab | LTCG/STCG rates |
| Tenure | Short to Medium (1-5 yrs) | Long Term (5-20 yrs) |
RD Interest Rates India 2026 (Major Banks)
RD rates stay closely aligned with FD rates. Here are the current estimated annual rates for a 12-month tenure:
- State Bank of India (SBI): 6.80% – 7.10% per annum
- Post Office RD: 6.70% (Fixed 5-year tenure)
- HDFC/ICICI Bank: 7.00% – 7.25% per annum
- Small Finance Banks: Up to 8.50% per annum
Frequently Asked Questions
How much interest will I earn on a monthly RD of ₹0.05L?
For a monthly Recurring Deposit (RD) of ₹0.05L at a rate of 7%, your total maturity value after 5 years will be approximately ₹3.597L. This calculation accounts for quarterly compounding, which is the standard method used by Indian banks.
How is RD interest calculated in 2026? (Quarterly vs Monthly)
Most Indian banks and the Post Office calculate RD interest using quarterly compounding. Even though you deposit monthly, the interest is calculated as if each installment is a separate FD with a decreasing tenure. This is mathematically better for the saver than simple interest.
SBI vs Post Office RD: Which is better for a 5-year tenure?
The Post Office RD has a fixed 5-year tenure and the rate is set by the government quarterly. SBI and other banks offer flexible tenures from 6 months to 10 years. In terms of rates, the Post Office often offers slightly higher rates than big commercial banks for the 5-year bucket.
What is the minimum and maximum tenure for a Recurring Deposit?
In commercial banks, the minimum tenure is usually 6 months and the maximum is 10 years. In the Post Office, the RD tenure is fixed at 5 years, which can be extended for another 5 years.
Can I withdraw my RD before maturity? (Premature closure rules)
Yes, most banks allow premature withdrawal with a penalty of 0.5% to 1%. For Post Office RDs, premature closure is allowed after 3 years, but the interest paid will be equal to the Post Office Savings Account rate instead of the RD rate.
Is RD interest taxable in 2026? (TDS on RD)
Yes, RD interest is fully taxable. Banks deduct 10% TDS if the interest earned across all your RDs and FDs in a bank exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year.
What happens if I miss an RD installment?
Banks usually charge a small penalty (e.g., ₹1 to ₹2 per ₹100) for every missed installment. If you miss multiple installments (usually 4 to 6), the bank may convert the RD into a regular savings account or close it.
What are the latest Senior Citizen RD interest rates for 2026?
Senior citizens (above 60) typically receive an additional 0.50% to 0.75% interest over regular RD rates in most Indian banks. The Post Office does not offer a separate higher rate for senior citizens on RDs.
RD vs SIP: Which is safer and better for small savings?
An RD is 100% safe with guaranteed returns and DICGC insurance. An SIP (in Mutual Funds) is market-linked and carries risk but has the potential for much higher long-term returns (12-15%). Use RDs for short-term goals (<3 years) and SIPs for long-term goals.
Can I take a loan against my RD account?
Yes, most banks and the Post Office allow you to take a loan or overdraft up to 90% of your RD balance. The interest rate on the loan is typically 1-2% higher than the RD interest rate.
⚠️ Disclaimer
The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.