Saving calculator
RD Calculator
A recurring deposit builds a lump sum out of a monthly habit. The interest looks modest against the total deposited — this explains why that is arithmetic rather than a bad rate.
Your numbers
That is 5 years.
Maturity value
₹7,15,542
Your first instalment earns interest for 5 years. Your last earns it for one month — which is why the interest looks small against the total deposited.
- Total deposited
- ₹6,00,000
- Interest earned
- ₹1,15,542
- Instalments
- 60
How the balance builds
Deposits stack in a straight line. Interest curves upward as the balance grows.
- Deposited
- Interest
Year by year
Cumulative deposits, interest and balance at each year-end.
| Year | Deposited | Interest | Balance |
|---|---|---|---|
| Year 1 | ₹1,20,000 | ₹4,487 | ₹1,24,487 |
| Year 2 | ₹2,40,000 | ₹17,658 | ₹2,57,658 |
| Year 3 | ₹3,60,000 | ₹40,118 | ₹4,00,118 |
| Year 4 | ₹4,80,000 | ₹72,515 | ₹5,52,515 |
| Year 5 | ₹6,00,000 | ₹1,15,542 | ₹7,15,542 |
The arithmetic
How this calculator works
No proprietary model, no adjustment factor we will not name. This is the standard formula, applied exactly as written.
Each instalment earns for the time it stays on deposit:
M = Σ P × (1 + r ÷ 400)^((n − k + 1) ÷ 3)
k=1..n
where the k-th instalment remains on deposit for
(n − k + 1) months, and quarterly compounding means
three months to a compounding period.- P
- Monthly instalment
- r
- Annual rate as a percentage
- n
- Number of instalments
- k
- Which instalment — 1 is the first
- M
- Maturity value
- Summing every instalment separately is exact and, more usefully, transparent — you can see precisely why the last instalment contributes almost nothing in interest.
- The divisor of 400 is the quarterly rate: the annual percentage divided by 100 to make it a decimal, then by 4 for the quarter.
Worked example
The same maths, on real numbers
₹10,000 a month for five years at 6.8%, compounded quarterly.
| Monthly instalment | ₹10,000 |
|---|---|
| Rate | 6.8% p.a. |
| Tenure | 60 months |
| Total deposited | ₹6,00,000 |
| Interest earned | ₹1,15,542 |
| Maturity value | ₹7,15,542 |
Interest is about 19% of what you put in, which looks thin next to a lump-sum FD at the same rate. The reason is simple: your first instalment earns for sixty months, your last for one, and the average across all sixty is roughly thirty. An RD is not a weaker product than an FD — it is the same product used by someone who does not have the lump sum yet, and that is exactly who it is for.
What this calculator assumes
- Every instalment is paid on time. Missed instalments usually attract a small penalty and reduce the maturity value.
- Interest compounds quarterly, the standard for bank recurring deposits.
- The rate is fixed at booking and applies for the full tenure, even if rates move afterwards.
- Figures are gross, before tax.
What it deliberately leaves out
- TDS and slab-rate tax on the interest are not deducted.
- Post office RDs use a slightly different convention and a rate set by the government each quarter — figures there may differ a little.
- Premature closure penalties are not modelled.
Questions about the recurring deposit calculation
It depends entirely on when you need the money. For a goal within three years an RD is usually right — the amount and date are certain, which is what a near-term goal requires. For anything beyond five years an RD's post-tax return is unlikely to beat inflation, and a SIP into a suitable fund gives you a better chance, at the cost of certainty.
Most banks charge a small penalty per missed instalment and may close the account after a run of defaults. The maturity value also drops, since that money never went in. Setting up a standing instruction on salary day removes the problem entirely.
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