Is RD interest taxable?

Yes — fully taxable at your income tax slab rate. TDS at 10% if total interest across all deposits in that bank exceeds ₹40,000 (₹50,000 for seniors). Report in ITR under "Income from other sources".

What if I miss a monthly deposit?

Bank charges a small penalty (₹1-2 per ₹100 shortfall typically). Consistent missed deposits (6 consecutive) can cause premature closure with reduced interest. Set up auto-debit from savings account to avoid this.

Can I withdraw early?

Yes, with penalty. Most banks charge 1-2% off the applicable interest rate. Example: opened at 7% RD, break after 2 years of 5-year term → you get 2-year rate (say 6.5%) minus 1% penalty = 5.5%. Post Office RD has stricter rules.

Is RD interest taxable?

Yes — fully taxable at your income tax slab rate. TDS at 10% if total interest across all deposits in that bank exceeds ₹40,000 (₹50,000 for seniors). Report in ITR under "Income from other sources".

What if I miss a monthly deposit?

Bank charges a small penalty (₹1-2 per ₹100 shortfall typically). Consistent missed deposits (6 consecutive) can cause premature closure with reduced interest. Set up auto-debit from savings account to avoid this.

Can I withdraw early?

Yes, with penalty. Most banks charge 1-2% off the applicable interest rate. Example: opened at 7% RD, break after 2 years of 5-year term → you get 2-year rate (say 6.5%) minus 1% penalty = 5.5%. Post Office RD has stricter rules.

RD Calculator (Recurring Deposit)

Recurring Deposit maturity — Indian bank formula. Fixed monthly deposit over a chosen tenure, quarterly compounding.

Result

Maturity value

₹359,295

Total deposited₹5,000/month × 60 months₹300,000
Interest earned₹59,295
Effective annual yield3.67%

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How to use this calculator

Enter your monthly deposit amount.
Enter the bank's RD interest rate.
Enter tenure in months (multiples of 3 typical).
Read the maturity value + total interest.

About this tool

Recurring Deposit (RD) is a monthly savings scheme offered by all Indian banks — deposit a fixed amount every month for a chosen tenure and get lump-sum maturity value. Interest is compounded quarterly, so effective yield is slightly higher than the quoted rate. Popular for salaried employees to build savings discipline. Minimum tenure 6 months, maximum 10 years, typically in multiples of 3 months. Post Office RD offers 6.7% (currently) with government backing but only 5-year tenure. Bank RD rates are 0.25-1% lower than same-tenure FD.

Frequently asked

FD is better if you have a lump sum right now — higher rates and no monthly commitment. RD is better if you want to save gradually from monthly income — builds discipline, ideal for salaried employees who cannot invest a lump sum upfront.

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