RD Calculator
Recurring deposit maturity, compounded quarterly the way banks do it.
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Result
Ask about RD Calculator
Questions about what this tool does, which option to pick, or what it can and cannot handle.
The question you type here is sent to an AI provider to be answered — your files and whatever you put in the tool above are not, and the assistant cannot see them. Answers are generated and can be wrong. The tool itself is not guessing: it runs deterministic code on your device.
About the RD Calculator
A recurring deposit takes a fixed instalment every month and pays a fixed rate, so it is a disciplined savings habit with a guaranteed outcome. The arithmetic is less obvious than it looks, and the difference between doing it properly and doing it roughly is not small.
Indian banks compound recurring deposits quarterly, and each instalment earns only for the months it has actually been in the account. The first instalment earns for the whole term; the last earns for one month. So the maturity value is not the total deposited grown at the rate, and it is not a simple monthly annuity either — treating it as one overstates the result noticeably on a long term. This tool computes each instalment separately against the quarterly compounding the bank applies, which is why its figure will match a bank's own quote rather than sitting a few thousand above it.
The interest is smaller than the headline rate feels, and that is not the bank being unfair. On a sixty-month deposit the average rupee has been in the account for about thirty months, not sixty, so roughly half the rate is what the total deposited effectively earns. Reading the interest line against the deposited line makes this concrete.
Two practical notes. Missing an instalment attracts a penalty and shortens the earning period for that month, neither of which is modelled here. The interest is also taxed at whatever rate your income attracts, in the year it is credited rather than the year it is paid, so setting this beside an exempt scheme compares two unlike things.
How to use it
- 1Enter the instalment you will pay each month and the rate the bank quotes.
- 2Set the tenure in months rather than years — most recurring deposits are quoted that way.
- 3Read the maturity value against the total deposited to see what the interest actually amounted to.
- 4Compare the result against the bank's own quote; it should match, because the compounding matches.
Questions
- Why is the interest lower than I expected?
- Because most of the money has not been in the account for the full term. On a five-year deposit the average instalment has earned for about half the period, so the total interest is close to half of what the headline rate on the full amount would suggest.
- Why compound quarterly rather than monthly?
- Because that is the convention Indian banks and post offices use for these accounts. Compounding monthly would produce a slightly higher figure than the bank will actually pay you.
- What if I miss a month?
- Most banks charge a small penalty per missed instalment and some close the account after several. The missed month also earns nothing, which reduces the maturity beyond the penalty itself.
- Is this better than a monthly investment in a fund?
- It is safer and it is guaranteed, and over long periods it has historically returned considerably less. Which is better depends on the horizon and on whether you can tolerate a falling balance.