How to use this calculator
- Enter or choose monthly instalment.
- Enter or choose interest rate (per year).
- Enter or choose tenure.
- Enter or choose interest compounded.
- The maturity value updates as you type. Use Copy result or Share to keep it.
Method
M = Σ P × (1 + r ÷ q)^(q × t ÷ 12) over every instalment, where t is the months it stays invested. For quarterly compounding: M = P × [(1 + i)^(n/3) − 1] ÷ [1 − (1 + i)^(−1/3)], i = r ÷ 4
- P
- monthly instalment
- r
- annual interest rate ÷ 100
- q
- compounding periods per year
- n
- tenure in months
Worked example
- i = 7% ÷ 4 = 1.75% a quarter; n = 60 months = 20 quarters.
- (1.0175)²⁰ = 1.41478 and 1 − (1.0175)^(−1/3) = 0.0057662.
- M = 5,000 × 0.41478 ÷ 0.0057662 ≈ ₹3,59,664.
₹5,000 a month for five years at 7% compounded quarterly matures at about ₹3.60 lakh, of which ₹59,664 is interest.
What the result means
An RD earns less than a lump-sum fixed deposit at the same rate, because each instalment is invested for a shorter time. Compare the interest with what a SIP or a PPF might earn over the same period.
Assumptions and limits
- Each instalment is paid at the start of its month and earns interest for the remaining months.
- The rate is fixed for the tenure, as it is for bank and post office RDs once opened.
- Some banks round the maturity differently or use slightly different day counts.
- TDS on interest and penalties for missed instalments are not included.
Questions
Is RD interest taxable?
Yes, RD interest is taxed as income at your slab rate, and banks may deduct TDS once interest crosses the threshold.
Why is quarterly compounding used?
Quarterly compounding is a common convention for Indian RDs, but check the terms of your deposit and choose the frequency it states.
Please note: Returns are illustrations at a constant rate, not predictions or guarantees. Investments can lose value. This is not investment advice.