The Real Problem This Solves
People think a recurring deposit earns interest on the full amount from day one. It doesn't. Each monthly deposit only earns for the time it stays invested.
That's why your RD maturity is lower than you'd expect. This calculator shows the accurate figure.
How RD Interest Really Works
Each monthly deposit compounds quarterly for its remaining tenure. Your first deposit earns the most; your last earns almost nothing. The maturity is the sum of all these.
Example: Priya puts ₹5,000/month into an RD at 6.7% for 5 years. She deposits ₹3 lakh total, and it matures at about ₹3,56,000, earning roughly ₹56,000 in interest. The discipline of monthly saving is the real win here.
| Monthly Deposit | Rate | Tenure | Maturity |
|---|---|---|---|
| ₹5,000 | 6.7% | 5 years | ~₹3,56,000 |
| ₹10,000 | 6.7% | 5 years | ~₹7,12,000 |
| ₹5,000 | 6.7% | 3 years | ~₹1,99,000 |
Frequently Asked Questions
Why is my RD maturity lower than a lump-sum FD?
Because in an RD, money is invested gradually. Your later deposits earn interest for only a few months, unlike an FD where the full amount compounds from day one.
Is RD interest taxable?
Yes, like FDs. RD interest is added to your income and taxed at your slab. TDS may apply above ₹40,000 interest per year.
Related Calculators
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