Calculate your Recurring Deposit maturity amount with quarterly compounding
RD uses quarterly compounding (standard bank formula). Interest is taxable as per your income tax slab.
Maturity Amount
₹1,28,425
Total Deposited
₹1,20,000
Interest Earned
₹8,425
A Recurring Deposit (RD) is a special type of term deposit offered by banks and post offices in India that allows you to make fixed monthly deposits over a chosen tenure and earn interest on them. It is essentially a combination of the systematic investing feature of a SIP with the safety and guaranteed returns of a Fixed Deposit.
RDs are perfect for salaried individuals who want to save a fixed amount each month and build a lump sum over time. You can start an RD with as little as ₹100 per month at most banks and post offices, making it one of the most accessible savings instruments.
| Feature | RD | SIP (Mutual Fund) |
|---|---|---|
| Returns | 6–8% (fixed) | 10–15% (market-linked) |
| Risk | Zero | Low to High |
| Minimum Investment | ₹100/month | ₹500/month |
| Liquidity | Moderate (premature penalty) | High (ELSS: 3yr lock-in) |
| Tax | Interest taxable as income | LTCG after 1 year at 12.5% |
| Suitable for | Short term (1–5 years) | Long term (5+ years) |
In general, RDs are better for short-term goals with a fixed timeline (buying a gadget, emergency fund top-up, vehicle down payment). For long-term wealth creation (5+ years), SIP in equity mutual funds almost always outperforms RDs due to the power of market returns compounding over time.
Post Office RD currently offers 6.7% p.a. with quarterly compounding. Post Office RDs have the highest safety (backed by Government of India) and are available at all post office branches across India.