A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a set tenure. At the end of the tenure, you receive the total deposited amount plus interest — compounded quarterly in most banks and the Post Office.

RD is designed for people who want to build a corpus through monthly savings rather than a lump sum investment. The interest rate is fixed at the time of opening the account and does not change during the tenure — making it predictable and low-risk.

RD Maturity Reference Table (Quarterly Compounding at 6.8%)

Based on 6.8% p.a. — close to current SBI and Post Office RD rates for 1–5 year tenure.

Monthly Deposit	1 Year	2 Years	3 Years	5 Years	Interest Earned (5yr)
₹500	₹6,219	₹12,647	₹19,289	₹35,268	₹5,268
₹1,000	₹12,437	₹25,294	₹38,578	₹70,536	₹10,536
₹2,000	₹24,874	₹50,588	₹77,156	₹1,41,072	₹21,072
₹5,000	₹62,186	₹1,26,470	₹1,92,891	₹3,52,681	₹52,681
₹10,000	₹1,24,372	₹2,52,941	₹3,85,782	₹7,05,362	₹1,05,362

Investing ₹5,000/month for 5 years: you deposit ₹3 lakh total and receive ₹3,52,681 — interest earned ₹52,681.

RD Interest Rates — Major Banks & Post Office (FY 2025–26)

Rates for general public. Senior citizens typically get 0.25%–0.50% extra.

Bank / Institution	1 Year	2 Years	3 Years	5 Years
SBI	6.80%	7.00%	6.75%	6.50%
HDFC Bank	6.75%	7.05%	6.70%	6.55%
ICICI Bank	6.90%	7.10%	6.80%	6.60%
Axis Bank	6.85%	7.10%	6.75%	6.50%
Kotak Mahindra	7.00%	7.15%	6.80%	6.65%
Post Office RD	6.70%	6.70%	6.70%	6.70%

Post Office RD currently offers 6.70% for all tenures — lower than most banks for 2–3 year RDs, but government-backed and safe. Verify current rates before opening an account.

How to Use This Calculator

Enter Monthly Investment — the fixed amount you will deposit every month
Enter Annual Interest Rate — check your bank’s current RD rate from the table above
Set Tenure in years or months
Results show instantly — Maturity Value, Total Invested, and Interest Earned

Tip: To simulate Post Office RD, enter 6.70%. For SBI RD for 3 years, enter 6.75%. Change the rate to compare returns across banks without opening multiple accounts.

RD vs FD vs SIP — Which One to Choose?

These three are often compared because they all grow money safely over time — but they work differently and suit different needs.

Factor	RD	FD	SIP (Mutual Fund)
Investment type	Fixed monthly deposit	One-time lump sum	Monthly, flexible amount
Returns	Fixed, 6.5–7.2% p.a.	Fixed, 6.5–7.5% p.a.	Market-linked, 10–12% avg
Risk	Zero — guaranteed	Zero — guaranteed	Market risk, can fluctuate
Premature exit	Allowed with penalty	Allowed with penalty	Allowed anytime, no penalty
Tax on returns	Taxable as per slab	Taxable as per slab	LTCG at 12.5% after 1 year
Best suited for	Monthly savers	Lump sum investors	Long-term wealth building

Choose RD if you want to save a fixed amount every month with guaranteed returns and zero risk. Choose FD if you have a lump sum ready. Choose SIP if you can accept some risk and are investing for 5+ years — historically, equity mutual fund SIPs have delivered significantly higher returns than RD over long tenures.

Frequently Asked Questions (FAQ)

At SBI’s current 5-year RD rate of 6.50% with quarterly compounding, ₹5,000/month for 5 years gives approximately ₹3,50,437. Total deposited: ₹3,00,000. Interest earned: ~₹50,437. For 6.80%, maturity is ₹3,52,681 — use the calculator above with your bank’s exact rate.

Post Office RD offers 6.70% for all tenures and is fully government-backed — suitable for those who prioritize safety over returns. Most major banks currently offer higher rates for 1–3 year tenures (6.80–7.15%). For pure returns, a bank with higher RD rates wins. For absolute safety and those in smaller towns with easier Post Office access, Post Office RD is a solid choice.

Yes. RD interest is added to your income and taxed as per your slab every year — even if you receive it only at maturity. TDS is deducted at 10% if total interest across all RDs in a bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). Submit Form 15G or 15H to avoid TDS if your total income is below the taxable limit.

Yes, most banks allow premature closure after a minimum lock-in period (usually 3–6 months). A penalty of 1–2% is applied on the interest rate — so you earn less than the agreed rate. Post Office RD allows premature closure only after 3 years, with a reduced interest rate applied.

Both involve monthly investments, but RD gives fixed guaranteed returns (6.5–7%) while SIP returns depend on the mutual fund’s market performance — averaging 10–12% historically over long periods but with year-to-year fluctuations. RD is suitable for short-term goals (1–5 years) and risk-averse investors. SIP is better for long-term goals (7+ years) where higher inflation-beating returns are needed.