Investment Summary
Yearly Breakdown
| Year | Opening Balance | Interest Earned | Closing Balance |
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A Recurring Deposit (RD) Calculator is an essential financial tool that helps you estimate the total maturity amount and interest earned on your monthly deposits. Recurring Deposits are popular among individuals who want to save a fixed amount of money every month while earning a secure and guaranteed interest rate.
How RD Interest is Calculated
In most banking systems, the interest on a Recurring Deposit is compounded quarterly. This means the bank adds the accrued interest to your principal balance every three months, and subsequent interest is calculated on this new, higher balance.
Because you are depositing money every single month, each installment earns interest for a different duration. The first deposit earns interest for the entire tenure, while the last deposit earns interest for just one month. The calculator figures out the exact compounding for each individual monthly deposit and adds them all together to give you a highly accurate final maturity value.
How to Use This Calculator
- Enter your Monthly Investment amount. This is the money you plan to deposit into the RD account every month.
- Enter the Annual Interest Rate offered by your bank.
- Specify the Time Period in months. For example, enter 12 for a one-year RD, or 60 for a five-year RD.
- The dashboard will instantly calculate your Total Maturity Amount, Total Invested, and the Wealth Gain percentage without any page reloads.
Frequently Asked Questions
Is the interest earned on a Recurring Deposit taxable?
Yes, the interest you earn from a Recurring Deposit is fully taxable. It is added to your total annual income and taxed according to your applicable income tax slab. Banks may also deduct TDS (Tax Deducted at Source) if your interest income exceeds the prescribed limits.
Can I change my monthly deposit amount during the tenure?
Standard Recurring Deposits require you to invest a fixed sum every month, and you cannot change this amount midway. However, some banks offer flexible RD schemes that allow you to deposit varying amounts up to a certain maximum limit each month.
What happens if I miss a monthly installment?
If you fail to pay your monthly installment on time, the bank will usually charge a small penalty fee. Frequent missed payments might lead the bank to prematurely close the RD account and refund your deposited amount with a lower interest rate.