حاسبة RD

What is an RD calculator?

An RD calculator estimates the maturity amount of a Recurring Deposit given the monthly deposit, interest rate, and tenure. It accounts for quarterly compounding (the standard convention used by Indian banks and post offices).

How RDs differ from SIP

RD locks in a fixed interest rate for the full tenure — no market risk, but no upside. SIP into mutual funds delivers higher long-term returns (10–14% for equity vs ~6.5% for RD) but with volatility. For short horizons (1–5 years) RD is safer; for 7+ year horizons SIP usually wins comfortably.

Choosing an RD provider

Compare effective annualized rate (CAGR) not just headline rate — quarterly compounding adds about 0.1–0.2% to the effective rate vs the nominal. Small Finance Banks offer the highest rates but are insured by DICGC up to ₹5 lakh per depositor — split larger amounts across institutions for full insurance coverage.

Who uses RDs and when

Salaried individuals saving toward a specific goal within 1–3 years — a vehicle down payment, vacation fund, or emergency buffer — prefer RD because the fixed monthly deduction enforces discipline and the rate is locked on entry. Parents open RDs in a child's name for school fee savings. Small business owners use 6-month RDs to park surplus cash earning more than savings account rates but accessible within the year. Senior citizens who already have SCSS and POMIS accounts sometimes use RDs for additional short-term income without exceeding scheme limits.

RD vs SIP for short-term goals

For goals within 3 years — down payments, emergency funds, planned purchases — RD is almost always the better choice. Equity markets can remain below entry levels for 2–3 years during corrections; an RD guarantees you the full principal plus interest on the maturity date you need. Liquid fund SIPs offer slightly higher post-tax returns (~6–7% vs ~6.5% for RD pre-tax) but with the complexity of tracking and potentially unfavorable short-term capital gains tax. For most investors, the simplicity of an RD beats the marginal return advantage of liquid funds for goals under 3 years.

Tax considerations for RD investors

RD interest is added to your total income and taxed at your slab rate every financial year — even if you haven't received it yet (accrual basis). Banks deduct TDS at 10% if annual RD interest across all deposits at that bank exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G (under 60) or Form 15H (senior citizens) at the start of each financial year if your total income is below the taxable limit, to prevent unnecessary TDS deduction and refund hassle. Include all RD interest — even from deposits maturing in future years — in your advance tax calculation to avoid interest under Section 234B and 234C.