Calculate RD maturity with quarterly compounding. Month-by-month schedule. Compare RD vs FD vs SIP. Updated with June 2026 bank rates including small finance banks.
Monthly depositsQuarterly compoundingMonth-by-month schedulevs FD and SIPBank rates 2026
Enter your RD details
₹
₹100₹5L
%
4%12%
months
6120
3 yrs
Compounding method: Quarterly - standard for all Indian bank RDs and post office RDs
Maturity amount
₹2.01 L
after 3 yrs
Total deposited
₹1.80 L
₹5,000/mo x 36
Interest earned
₹20,815
11.6% of deposits
Formula used
M = R x [(1+i)^n minus 1] / [1 minus (1+i)^(-1/3)]
M = Maturity amount
R = Monthly deposit (Rs 5,000)
i = Quarterly rate (7% / 4 / 100 = 0.017500)
n = Number of quarters (12)
Maturity = ₹2.01 L | Interest earned = ₹20,815
Balance growth - month by month
InterestDeposits
Month 1Maturity: ₹2.01 LMonth 36
Month-by-month RD statement
Showing first 12 months
Month
Deposit
Interest for month
Closing balance
Total deposited
1
₹5,000
₹29
₹5,029
₹5,000
2
₹5,000
₹59
₹10,088
₹10,000
3
₹5,000
₹88
₹15,176
₹15,000
4
₹5,000
₹118
₹20,293
₹20,000
5
₹5,000
₹148
₹25,441
₹25,000
6
₹5,000
₹178
₹30,618
₹30,000
7
₹5,000
₹208
₹35,826
₹35,000
8
₹5,000
₹238
₹41,064
₹40,000
9
₹5,000
₹269
₹46,333
₹45,000
10
₹5,000
₹299
₹51,633
₹50,000
11
₹5,000
₹330
₹56,963
₹55,000
12
₹5,000
₹361
₹62,324
₹60,000
RD vs FD vs SIP - which is better for ₹5,000/month?
Same monthly amount (₹5,000) over 3 yrs
Recurring Deposit
Monthly deposit₹5,000
Rate7% (guaranteed)
Total deposited₹1.80 L
Interest earned₹20,815
Maturity
₹2.01 L
Zero risk · Guaranteed
VS
FD (lumpsum)
One-time deposit₹1.80 L
Rate7% (same rate)
Tenure3 yrs
Interest earned₹41,659
Maturity
₹2.22 L
Higher than RD · Needs lumpsum
VS
SIP (equity 12%)
Monthly SIP₹5,000
Expected return12% (historical avg)
Total invested₹1.80 L
Gains₹37,538
Maturity (est.)
₹2.18 L
Not guaranteed · Market risk
FD beats RD at the same rate because the lumpsum is invested earlier and compounds for the full tenure from Day 1. SIP at 12% beats both for horizons above 3 years - but carries market risk. RD is best when you do not have a lumpsum available and want guaranteed monthly savings discipline.
RD interest rates - Indian banks 2026
All rates are annual, compounded quarterly. Senior citizens get 0.25 to 0.75% extra.
Bank
1 yr
2 yrs
3 yrs
5 yrs
Sr. citizen
SBI
6.80%
7.00%
6.75%
6.50%
+0.50%
HDFC Bank
6.60%
7.25%
7.00%
7.00%
+0.50%
ICICI Bank
6.70%
7.20%
7.00%
7.00%
+0.50%
Axis Bank
6.70%
7.25%
7.10%
7.00%
+0.75%
Kotak Mahindra
7.10%
7.25%
7.00%
6.20%
+0.40%
Post Office RD
6.70%
6.70%
6.70%
6.70%
N/A
Small Finance*
9.00%
8.75%
8.50%
8.00%
+0.50%
Rates indicative for June 2026. Small Finance Banks include AU, Jana, ESAF, Equitas, Ujjivan - higher rates with DICGC Rs 5L cover. RD rates may differ slightly from FD rates at the same bank.
Recurring Deposit (RD) - Complete Guide for Indian Savers 2026
A Recurring Deposit (RD) is a savings product offered by all scheduled commercial banks, small finance banks, cooperative banks, and the Post Office in India. You deposit a fixed amount every month for a chosen tenure - ranging from 6 months to 10 years - and receive the total deposited amount plus compounded interest at maturity. It is essentially the monthly savings equivalent of a Fixed Deposit.
RDs occupy a unique space in Indian personal finance. They combine the capital protection and guaranteed returns of an FD with the disciplined monthly savings structure of a SIP. Unlike equity investments, there is no market risk. Unlike a lumpsum FD, you do not need a large amount to get started - most banks allow RDs for as little as Rs 100 per month.
This guide explains how RD interest is calculated, how RD compares to FD and SIP across different time horizons and goals, the tax implications, which lenders offer the best rates in 2026, and the specific situations where RD is the right choice.
How RD interest is calculated - quarterly compounding explained
The RBI mandates that all bank RDs in India use quarterly compounding. This means interest is compounded four times per year, which earns slightly more than simple annual compounding but less than monthly compounding. The Post Office RD also uses quarterly compounding.
The key nuance of RD interest calculation is that each monthly instalment earns interest only from its deposit date, not from the start of the RD. The first deposit earns interest for the full tenure, the second deposit earns interest for one month less, and so on. This is why the total interest earned on an RD is always less than the interest on a lumpsum FD of the same total amount at the same rate.
Step-by-step example: Rs 5,000/month RD at 7% for 3 years (36 months)
1
Convert annual rate to quarterly rate: Quarterly rate i = 7% / 4 / 100 = 0.0175 per quarter
2
Calculate number of quarters: n = 36 months / 3 = 12 quarters
3
Apply the RD maturity formula: M = 5,000 x [(1.0175)^12 minus 1] / [1 minus (1.0175)^(-1/3)]
4
Compute (1.0175)^12: (1.0175)^12 = 1.2314
5
Solve the formula: M = 5,000 x 0.2314 / [1 minus 0.9942] = 5,000 x 0.2314 / 0.0058 = approx Rs 1,99,483
6
Total deposited: 5,000 x 36 = Rs 1,80,000
7
Interest earned: Rs 1,99,483 minus Rs 1,80,000 = Rs 19,483
Note: The calculator above uses an iterative monthly simulation that produces a slightly more accurate result than the closed-form formula due to partial quarter treatment. The difference is typically less than Rs 50 on a Rs 2 lakh deposit.
For comparison, a lumpsum FD of Rs 1,80,000 (the same total amount) at 7% for 3 years with quarterly compounding would yield a maturity of approximately Rs 2,21,800 - earning Rs 41,800 in interest versus the RD's Rs 19,483. The FD earns more because the entire Rs 1,80,000 is invested from Day 1, while in the RD each Rs 5,000 only starts earning from its deposit date.
RD vs FD vs SIP - complete comparison across goals and horizons
Choosing between RD, FD, and SIP depends on three variables: whether you have a lumpsum or can only invest monthly, your investment horizon, and your tolerance for risk. The table below maps these factors to the right product.
Factor
Recurring Deposit (RD)
Fixed Deposit (FD)
SIP (equity mutual fund)
Investment pattern
Fixed amount monthly
One-time lumpsum
Fixed amount monthly
Capital protection
100% guaranteed (up to DICGC Rs 5L)
100% guaranteed (up to DICGC Rs 5L)
Not guaranteed; market-linked
Returns
6.5 to 9% (guaranteed)
6.5 to 9% (guaranteed)
10 to 15% historical avg (not guaranteed)
Compounding method
Quarterly
Quarterly
Daily (NAV-based)
Minimum investment
Rs 100 to Rs 500/month
Rs 1,000 (most banks)
Rs 100/month (most fund houses)
Tax on returns
Fully taxable at slab rate
Fully taxable at slab rate
12.5% LTCG above Rs 1.25L per year (equity)
Premature exit
Allowed with 1 to 2% rate penalty
Allowed with 0.5 to 1% rate penalty
No exit penalty after 1 year (most equity funds)
Loan facility
Up to 80 to 90% of deposited amount
Up to 80 to 90% of deposit
Units can be pledged as collateral
Best investment horizon
6 months to 3 years
3 months to 5 years
5 years and above
Ideal for
Monthly savers, short goals, no lumpsum
Lumpsum available, fixed short-term goal
Long-term wealth creation, retirement
RD maturity amounts - quick reference at 7% interest
The table below shows approximate RD maturity amounts for common deposit sizes at 7% annual rate with quarterly compounding. Use the calculator above to compute exact values for any rate.
Monthly deposit
1 year maturity
2 year maturity
3 year maturity
5 year maturity
Interest earned (3yr)
Rs 500
Rs 6,228
Rs 12,954
Rs 20,198
Rs 35,949
Rs 1,798
Rs 1,000
Rs 12,457
Rs 25,907
Rs 40,396
Rs 71,898
Rs 3,596
Rs 2,000
Rs 24,913
Rs 51,814
Rs 80,793
Rs 1,43,796
Rs 7,193
Rs 5,000
Rs 62,283
Rs 1,29,535
Rs 2,01,981
Rs 3,59,490
Rs 18,981
Rs 10,000
Rs 1,24,566
Rs 2,59,070
Rs 4,03,962
Rs 7,18,980
Rs 37,962
Rs 25,000
Rs 3,11,416
Rs 6,47,675
Rs 10,09,906
Rs 17,97,450
Rs 94,906
Rs 50,000
Rs 6,22,831
Rs 12,95,350
Rs 20,19,811
Rs 35,94,900
Rs 1,84,811
Tax on RD interest - what you actually keep after tax
RD interest is classified as Income from Other Sources under the Income Tax Act and is taxable at your applicable income tax slab rate - exactly like bank FD interest, savings account interest, or post office interest income. There is no special tax treatment or exemption for RD interest, unlike PPF or Sukanya Samriddhi interest which are tax-free.
Tax bracket
Gross RD interest (3yr, Rs 5,000/mo, 7%)
Tax paid
Net interest after tax
Effective post-tax return
0% (below taxable limit)
Rs 19,483
Rs 0
Rs 19,483
7.00%
5% slab
Rs 19,483
Rs 974
Rs 18,509
6.65%
20% slab
Rs 19,483
Rs 3,897
Rs 15,586
5.60%
30% slab
Rs 19,483
Rs 5,845
Rs 13,638
4.90%
TDS on RD interest
Banks deduct TDS at 10% if total interest (across all deposits at that bank) exceeds Rs 40,000 per financial year (Rs 50,000 for senior citizens). TDS is deducted at source and reflected in your Form 26AS. You must declare all RD interest in your ITR regardless of whether TDS was deducted.
How to avoid TDS
Submit Form 15G (below 60 years) or Form 15H (senior citizens) to your bank at the start of every financial year if your total income including RD interest is below the basic exemption limit. This must be submitted every year.
TDS rate if no PAN provided
If you do not provide your PAN to the bank, TDS is deducted at 20% instead of 10%, effectively doubling the deduction. Always ensure your PAN is updated in your bank records before opening an RD.
The tax treatment makes RD less attractive than PPF or NPS for individuals in the 20% or 30% tax bracket with long investment horizons. For people in the nil or 5% bracket - students, homemakers, retired individuals with low income - RD remains an excellent risk-free savings tool since the tax impact is minimal.
Post Office Recurring Deposit (PORD) - 2026 details
The Post Office Recurring Deposit (also called Post Office RD or PORD) is one of the most popular small savings schemes in India, particularly in semi-urban and rural areas. It is backed by the Government of India, which means it carries sovereign guarantee and has no credit risk - unlike bank RDs which are covered only up to Rs 5 lakh under DICGC insurance.
Minimum depositRs 100 per month (any multiple of Rs 10)
Maximum depositNo upper limit
Premature closureAllowed after 3 years with 2% penalty
Loan against PORDUp to 50% of deposits after 1 year
Government guaranteeFull sovereign backing
DICGC coverageNot applicable (government scheme)
Who should choose Post Office RD
Risk-averse investorsSovereign guarantee vs bank's DICGC Rs 5L cap
Rural and semi-urban saversPost offices are widely accessible
Those depositing above Rs 5LNo credit risk unlike large bank deposits
NRI investorsNot eligible; PORD is for resident individuals only
Tax-sensitive investorsNote: interest is taxable like bank RD
Senior citizensBanks often give higher rates; compare both
Small Finance Bank RDs - higher rates, same DICGC protection
Small Finance Banks (SFBs) in India offer significantly higher RD interest rates than large scheduled commercial banks - often 8.5% to 9.5% per annum versus 6.5% to 7.25% at PSU and large private banks. SFBs are licensed and regulated by the RBI and deposits up to Rs 5 lakh are covered under DICGC (Deposit Insurance and Credit Guarantee Corporation) insurance, identical to large bank protection.
The higher rate at SFBs reflects their business model - they primarily lend to microfinance and small business borrowers at higher rates, which funds the higher deposit rates. For savers who keep deposits within the Rs 5 lakh DICGC limit, SFBs offer an excellent risk-to-return profile for RDs.
Small Finance Bank
1 yr RD rate
2 yr RD rate
3 yr RD rate
Sr. citizen bonus
DICGC cover
AU Small Finance Bank
7.75%
8.00%
8.00%
+0.50%
Yes, Rs 5L
Jana Small Finance Bank
8.25%
8.50%
8.25%
+0.50%
Yes, Rs 5L
Equitas Small Finance Bank
8.00%
8.25%
8.00%
+0.50%
Yes, Rs 5L
ESAF Small Finance Bank
8.50%
8.75%
8.50%
+0.50%
Yes, Rs 5L
Ujjivan Small Finance Bank
8.25%
8.50%
8.25%
+0.50%
Yes, Rs 5L
Rates indicative June 2026. Verify directly with the bank before opening an RD. Senior citizen rates apply to individuals aged 60 and above. Keep individual SFB deposits within Rs 5 lakh per bank to ensure full DICGC coverage.
When should you choose an RD over FD, SIP, or PPF?
RD is not the highest-return instrument available in India, but it excels in specific situations. Below are the scenarios where RD is the optimal choice and where other instruments serve better.
Choose RD when...
Saving for a short-term goal (1 to 3 years)
Guaranteed returns protect you from market volatility; a SIP could be in drawdown exactly when you need the money.
You have no lumpsum to invest
FD requires a lumpsum; RD allows you to build toward a goal from your monthly salary.
Building a specific-amount corpus
The predictable maturity amount makes planning straightforward - useful for car down payment, school fees, or home renovation.
Conservative risk profile
For retirees or risk-averse savers, the guaranteed return is worth the lower interest compared to equity.
Emergency fund top-up
RD in a liquid bank account allows monthly builds with a fixed end date; better discipline than a savings account where you might dip in.
Nil or low tax bracket
The tax impact on RD is minimal if your income is below Rs 7 lakh (new regime), making the gross return close to the net return.
Choose alternatives instead...
Horizon above 5 years
Better option: SIP in equity mutual funds
Equity has historically outperformed RD by 5 to 8% annually over long periods; the compounding advantage is enormous.
Tax-saving investment needed
Better option: ELSS or PPF
RD interest is fully taxable; ELSS gives tax deduction under 80C and PPF interest is completely tax-free.
Lumpsum available
Better option: Fixed Deposit
FD at the same rate always earns more than RD because the entire corpus compounds from Day 1.
High tax bracket (30%)
Better option: PPF, NPS, or debt mutual funds
Post-tax return on RD at 30% bracket drops to ~4.9%; PPF at 7.1% is completely tax-free.
Retirement corpus building
Better option: NPS or ELSS SIP
Long horizon means equity exposure produces far better outcomes; NPS also offers additional tax benefit.
Child's education fund (10+ years)
Better option: Sukanya Samriddhi or equity SIP
SSY at 8.2% tax-free significantly outperforms RD for girl child education saving.
Compare RD with FD maturity at the same rate
See exactly how much more a lumpsum FD earns vs monthly RD at the same interest rate
Frequently asked questions about Recurring Deposits in India
What is the current RD interest rate in India in 2026?▼
RD interest rates in India in June 2026 range from 6.5% to 9.5% per annum depending on the bank and tenure. Major PSU banks like SBI offer 6.75 to 7.00% for 2 to 3 year RDs. Large private banks like HDFC and ICICI offer 7.00 to 7.25%. Small Finance Banks like Jana, ESAF, and AU Small Finance offer 8.00 to 9.00% for the same tenures. Senior citizens typically receive an additional 0.40 to 0.75% above the standard rate. Post Office RD currently offers 6.70% for a 5-year fixed tenure. Rates change quarterly based on RBI monetary policy, so always verify with the specific bank before opening an RD.
Why does FD earn more interest than RD at the same rate?▼
FD earns more because the entire lumpsum is invested from Day 1 and compounds on the full amount for the complete tenure. In an RD, only the first instalment earns interest for the full tenure; each subsequent instalment earns interest for progressively fewer months. For example, at 7% for 3 years: a lumpsum FD of Rs 1,80,000 earns approximately Rs 41,800 in interest. An RD of Rs 5,000/month for 36 months (same total deposit of Rs 1,80,000) earns approximately Rs 19,500. The difference is Rs 22,300, entirely because the FD corpus compounds for longer.
Can I open more than one RD at the same bank?▼
Yes, you can open multiple RD accounts at the same bank - even at the same branch. This is a common strategy: instead of one large RD, open several smaller RDs with different maturity dates to create a laddering effect. For example, open 3 RDs maturing at 12 months, 24 months, and 36 months. As each matures, you either use the funds for the planned goal or reinvest at the prevailing rate. This liquidity strategy ensures you are never locked out of all your savings simultaneously.
What is a Flexi RD and how does it differ from a standard RD?▼
A Flexi RD (offered by SBI, HDFC, and some other banks under product names like SBI Flexi Deposit) allows you to deposit more than the fixed minimum in any month. The core deposit earns standard RD interest; the excess amount deposited above the minimum earns FD-rate interest. This is useful for variable income earners who can deposit more in high-earning months and stick to the minimum in others, maximising returns on surplus without the inflexibility of a standard RD that charges penalties for missed or reduced deposits.
Is Post Office RD safe?▼
Post Office RD is among the safest investment options available in India because it carries sovereign guarantee from the Government of India. There is no credit risk regardless of the deposit amount, unlike bank RDs where DICGC insurance covers only up to Rs 5 lakh per depositor per bank. The current PORD rate is 6.70% for a 5-year tenure with quarterly compounding. The main limitations are the fixed 5-year tenure (no flexibility to choose shorter periods) and less convenient online management compared to bank RDs. For investors depositing above Rs 5 lakh who want complete safety, Post Office RD is significantly safer than any bank.
Can I get a loan against my RD?▼
Yes, most banks allow a loan against an RD up to 80 to 90% of the deposited amount after a minimum period (usually 3 to 6 months from opening). The loan interest rate is typically 1 to 2% above the RD interest rate. For example, if your RD earns 7%, the loan against it may be at 8 to 9%. This is an important liquidity option - if you face a cash crunch before your RD matures, you can take a loan rather than prematurely closing the RD and losing interest. The RD continues to earn interest while your loan runs, meaning you only pay the differential rate of 1 to 2% for the cash.
Does RD interest compound monthly or quarterly in India?▼
RD interest in India is compounded quarterly - four times per year. This applies to all bank RDs and Post Office RDs. Monthly compounding (12 times per year) would produce marginally higher returns but is not standard practice in Indian banking for RDs. The quarterly compounding standard is set by the Indian Banks Association (IBA) and RBI guidelines. For a 7% annual rate, the effective annual rate under quarterly compounding is 7.19% (using the formula: (1 + 0.07/4)^4 minus 1), compared to 7.23% for monthly compounding - a negligible difference for most deposit sizes.
What happens to my RD account if the bank fails?▼
If an RBI-regulated bank (scheduled commercial bank, small finance bank, or payments bank) fails, your deposits including RD balances are protected up to Rs 5 lakh per depositor per bank under DICGC (Deposit Insurance and Credit Guarantee Corporation) insurance. The Rs 5 lakh limit covers principal plus accrued interest combined across all deposit accounts you hold at that bank. To ensure maximum protection: keep total deposits at any single bank below Rs 5 lakh; spread larger amounts across multiple banks; and for amounts above Rs 5 lakh where you need absolute safety, use Post Office schemes which carry sovereign guarantee.
Can NRIs open an RD account in India?▼
NRIs can open RD accounts in India through specific account types. NRE (Non-Resident External) RD: deposits are repatriable, interest is tax-free in India, and the account is maintained in Indian rupees. NRO (Non-Resident Ordinary) RD: for Indian rupee earnings in India (rent, dividends, etc.), interest is taxable in India, and repatriation has limits. FCNR (Foreign Currency Non-Resident) accounts are available only as FDs, not RDs. NRI RD rates are the same as resident RD rates. Interest earned in NRE accounts may be taxable in the country of residence, depending on the applicable tax treaty.
