Finance & Banking CalcyZone Calculator

RD Calculator (Recurring Deposit)

Calculate the maturity value of a bank recurring deposit with quarterly compounding.

Total deposited

₹3,00,000

Interest earned

₹59,664

Maturity value

₹3,59,663.95

Step-by-step working

Each instalment of ₹5,000 grows at (1 + 7/400) per quarter for the months it remains
Sum of 60 instalments = ₹3,59,663.95

Mathematical Formula

Maturity = Σ (k = 0 … n−1) R × (1 + r/400)^((n − k)/3), where R = monthly deposit, r = annual rate, n = months; each instalment compounds quarterly for the time it stays deposited.

Overview & Explanation

In a recurring deposit you pay a fixed amount every month. Banks compound RD interest quarterly, so each instalment earns for its remaining months.

How It Works

The k-th instalment stays deposited for (n − k) months, i.e. (n − k)/3 quarters.
Grow each instalment at (1 + r/400) per quarter.
Add all instalments to get maturity.

Practical Applications

Saving monthly for a known expense.
Comparing bank RD with a SIP.

How a recurring deposit grows

A recurring deposit lets you save a fixed amount every month for a set term at a fixed interest rate. Indian banks and the post office usually compound RD interest quarterly. Each instalment earns interest only for the time it stays in the account, so the first instalment earns the most and the last earns very little.

In the bank-style method, the maturity value is the sum of each monthly instalment grown at (1 + r/4)^(4 × months remaining / 12), where r is the annual rate.

Worked example

Depositing 5,000 a month for 12 months at 7 percent: total deposits are 60,000. The first instalment grows for 12 months to about 5,359 and the last for one month to about 5,029. Adding all twelve gives a maturity value of roughly 62,320, so interest is about 2,320.

Tax and planning points

RD interest is fully taxable at your income-tax slab rate, and banks deduct TDS when total interest from the bank crosses the yearly threshold. Missing an instalment usually brings a small penalty. An RD suits disciplined short-term goals such as a vacation or a gadget; for goals longer than five years, equity SIPs have historically grown faster, with more risk.

Example 1: ₹5,000/month for 5 years at 7%

A standard 60-month RD.

Inputs

Monthly deposit (₹): 5000 · Interest rate (% p.a.): 7 · Tenure (months): 60

= entered

Step 1

Each instalment of ₹5,000 grows at (1 + 7/400) per quarter for the months it remains

Step 2

Sum of 60 instalments = ₹3,59,663.95

Maturity value

Result

= ₹3,59,663.95

Example 2: ₹10,000/month for 1 year at 6.8%

Short RD.

Inputs

Monthly deposit (₹): 10000 · Interest rate (% p.a.): 6.8 · Tenure (months): 12

= entered

Step 1

Each instalment of ₹10,000 grows at (1 + 6.8/400) per quarter for the months it remains

Step 2

Sum of 12 instalments = ₹1,24,487.29

Maturity value

Result

= ₹1,24,487.29

How it's calculated & sources

Maturity = Σ (k = 0 … n−1) R × (1 + r/400)^((n − k)/3), where R = monthly deposit, r = annual rate, n = months; each instalment compounds quarterly for the time it stays deposited.