What is the minimum amount to start an RD account?

The minimum investment amount for an RD account varies from bank to bank. Some banks and post offices allow you to start an RD with as little as Rs. 100 per month, making it highly accessible for retail investors.

Can I break my RD prematurely?

Yes, most banks allow premature withdrawal of a Recurring Deposit. However, doing so usually attracts a penalty—typically a 1% to 2% reduction in the applicable interest rate for the period the deposit was actually held.

What is the range of tenure for an RD?

The tenure for a Recurring Deposit generally ranges from a minimum of 6 months to a maximum of 10 years. You can choose any tenure in multiples of 3 months within this range, depending on your financial goals.

RD Calculator — Calculate Recurring Deposit Maturity | Fermor

Calculate Your Recurring Deposit Returns Instantly

A Recurring Deposit (RD) is a highly popular and stable investment instrument in India, similar to a Fixed Deposit (FD). However, unlike FDs where you invest a lump sum, an RD allows you to invest a fixed amount every month. This structure is excellent for salaried individuals, as it enforces financial discipline and cultivates a steady habit of regular saving. Most major banks and post offices offer attractive interest rates on RDs.

While making regular deposits is simple, manually calculating the compound interest accrued over the tenure is a multipart process. This is where an online RD Calculator becomes incredibly beneficial, doing the heavy math for you.

How can an RD Calculator help you?

Because a recurring deposit involves continuous monthly investments, tracking your returns manually is challenging. Banks compound RD interest quarterly, meaning each monthly deposit earns interest for a different duration. Our recurring deposit calculator simplifies this entirely:

•Exact Maturity Tracking: It automatically calculates the quarterly compounding on each individual monthly deposit, providing you with the precise maturity amount.

•Clarity in Financial Planning: By knowing exactly how much your investment will accrue at the end of the tenure, you can confidently align your RD with your future financial goals (like a vacation or purchasing a vehicle).

•Saves Valuable Time: Forget manual spreadsheets or complex formulas. You get immediate, error-free results within a fraction of a second.

•Interactive Comparisons: You can freely adjust the sliders to see how changing your monthly deposit by just Rs. 500 or increasing the tenure affects your final returns.

Note: As per RBI norms, RDs are liable for TDS deduction depending on your tax bracket. Our calculator shows the gross maturity amount before any applicable taxes.

The Formula Used for RD Maturity

An RD is not calculated using a simple compound interest formula because every monthly installment is compounded for a different period. The standard Indian banking formula for calculating the maturity value of a recurring deposit takes the sum of compounding for each deposit.

A = P * (1 + R/N)^(N*t)

Where A is the maturity amount, P is the monthly deposit, R is the annual interest rate, N is the compounding frequency (4 times a year for quarterly), and t is the time in years. The calculator applies this formula to every single month's deposit and sums them up to find the total value.

For example, if you deposit Rs. 5,000 every month for 1 year at an 8.25% annual interest rate, the first deposit earns interest for 12 months, the second for 11 months, and so on. Trying to solve this series manually is tedious, but our RD return calculator does it instantly.

How to use the Fermor RD Calculator

Our calculator is completely free, straightforward, and requires no financial expertise. Follow these quick steps:

•Adjust the "Monthly investment" slider to the amount you wish to save every month.

•Set the "Rate of interest" offered by your bank or post office.

•Choose your "Time period" by toggling between years or months, and adjusting the slider accordingly.

The donut chart will immediately update to show you the total money you invested versus the wealth generated purely through interest.

Frequently Asked Questions (FAQs)

Yes, as per RBI norms, the interest earned on a Recurring Deposit (RD) is fully taxable. If the interest earned across all your deposits with a bank exceeds Rs. 40,000 in a financial year (Rs. 50,000 for senior citizens), the bank will deduct TDS at 10%. If you do not provide your PAN, TDS is deducted at 20%.