RD Calculator
Calculate the returns on your monthly savings with our Recurring Deposit Calculator.
What is an RD Calculator?
An RD (Recurring Deposit) Calculator is a financial tool designed to help you estimate the maturity value of your monthly savings. Unlike an FD where you invest a lump sum, an RD allows you to deposit a fixed amount every month for a specific tenure. It is an excellent tool for disciplined savings, helping you visualize how small monthly contributions grow into a significant corpus over time.
How It Works
The RD calculator uses the compound interest formula applicable for quarterly compounding. Since you deposit money every month, each installment earns interest for a different duration (the first installment for the full tenure, the last one for just one month).
Example Calculation
Priya starts an RD of ₹5,000 per month for 2 years (24 months) at an interest rate of 6.5%.
- 1.Monthly Deposit (P) = ₹5,000
- 2.Rate (r) = 6.5%
- 3.Tenure = 24 months
- 4.Total Investment = 5,000 * 24 = ₹1,20,000
- 5.Interest Calculation: Compounded quarterly on each installment
- 6.Maturity Amount ≈ ₹1,28,436
- 7.Interest Earned ≈ ₹8,436
Why This Tool is Useful
- ✓Instantly calculates the complex interest on multiple monthly installments.
- ✓Helps in goal-based planning (e.g., saving for a vacation or bike).
- ✓Shows the clear difference between total investment and profit earned.
- ✓Allows you to compare different tenures to maximize returns.
- ✓Encourages financial discipline by showing the power of regular savings.
Tips & Comparison
- •RDs are great for short-term goals (1-3 years). For longer terms (>5 years), consider SIPs.
- •Missing an RD installment often attracts a penalty from the bank.
- •RD interest is taxable just like FD interest. TDS applies if interest exceeds ₹40k/year.
- •Post Office RDs are a popular alternative, often offering competitive rates.