RD Calculator – Recurring Deposit Returns Estimator
Plan your savings with our easy-to-use recurring deposit calculator.
Monthly Deposit
₹5,000
Interest Rate
7.00% p.a.
Tenure
3 Years
Compounding
quarterly
What is a Recurring Deposit Calculator?
A Recurring Deposit (RD) calculator is a financial tool designed to help you estimate the maturity amount of your recurring deposit investments. Unlike fixed deposits where you invest a lump sum amount, recurring deposits involve depositing a fixed amount at regular intervals (typically monthly) for a specified period.
The RD calculator takes into account your monthly deposit amount, the interest rate offered by the bank, the tenure of your deposit, and the compounding frequency to calculate the total interest earned and the final maturity amount. This helps you plan your savings and understand how your money will grow over time.
Recurring deposits are particularly popular among salaried individuals and those with regular income streams who want to build a corpus gradually through disciplined monthly savings. They offer higher interest rates than regular savings accounts while providing the security of guaranteed returns without market risks.
How to Use This Calculator
- Enter your monthly deposit amount - This is the fixed amount you'll deposit each month throughout the RD tenure.
- Specify the interest rate - Enter the annual interest rate offered by your bank for recurring deposits.
- Select the tenure - Choose how many years and months you want to continue your recurring deposit.
- Choose the compounding frequency - Select how often the interest is compounded (quarterly, monthly, half-yearly, or yearly).
- Check the senior citizen option if applicable - Senior citizens typically get an additional 0.5% interest rate on their deposits.
- View the results - The calculator will show your total investment, interest earned, and maturity amount, along with a quarterly breakdown.
Calculation Formula & Example
The Formula
A = P × (((1 + r)^n - 1) / r) × (1 + r)
Where:
- A = Maturity Amount
- P = Monthly Deposit Amount
- r = Rate of interest per month (Annual rate ÷ 12 ÷ 100)
- n = Number of months
Example Calculation
Let's calculate the maturity amount for a recurring deposit with the following parameters:
- Monthly deposit: ₹5,000
- Interest rate: 7% per annum
- Tenure: 3 years (36 months)
- Compounding frequency: Quarterly
Step 1: Calculate the monthly interest rate (r)
r = 7% ÷ 12 ÷ 100 = 0.00583
Step 2: Apply the formula
A = 5,000 × (((1 + 0.00583)^36 - 1) ÷ 0.00583) × (1 + 0.00583)
A = 5,000 × ((1.232 - 1) ÷ 0.00583) × 1.00583
A = 5,000 × 39.79 × 1.00583
A = ₹2,00,106
Result:
- Total amount deposited: ₹1,80,000 (₹5,000 × 36 months)
- Interest earned: ₹20,106 (₹2,00,106 - ₹1,80,000)
- Maturity amount: ₹2,00,106
Note: The actual calculation is more complex as each monthly installment earns interest for a different period. Banks typically use specialized formulas or software for precise calculations.
Benefits of Using This Calculator
- Financial Planning - Estimate the future value of your recurring deposits to plan for specific financial goals.
- Compare Different Options - Evaluate how different monthly deposit amounts, interest rates, and tenures affect your returns.
- Understand Compounding Benefits - See how different compounding frequencies (monthly, quarterly, half-yearly) impact your final returns.
- Senior Citizen Benefits - Calculate the additional returns you can earn with the higher interest rates offered to senior citizens.
- Disciplined Saving - Plan a systematic saving strategy by understanding how regular monthly deposits grow over time.
- Tax Planning - Estimate the interest income from your RDs to plan for tax liabilities, as RD interest is taxable.
Calculator Use Cases
Plan for expenses like vacations, gadget purchases, or festival shopping by setting up an RD with a suitable tenure and monthly deposit amount to reach your target amount.
Create a financial safety net by systematically building an emergency fund through recurring deposits, ensuring you have 3-6 months of expenses covered for unexpected situations.
Parents can use RDs to save for their children's upcoming education expenses like school fees, coaching classes, or entrance exam fees that are due in the next few years.
While RDs themselves don't offer tax benefits under Section 80C, they can be used alongside tax-saving investments to create a balanced portfolio that addresses both tax efficiency and liquidity needs.
Frequently Asked Questions
Related Financial Tools
Related Articles
Compare the features, benefits, and limitations of recurring and fixed deposits.
Learn strategies to get the best possible returns from your recurring deposit investments.
A comprehensive guide to how RD interest is taxed and strategies for tax efficiency.
Stay Updated with Financial Tips
Subscribe to our newsletter for the latest updates on personal finance, investment strategies, and financial tools.