RD Calculator (Recurring Deposit)

Simulate bank or post office Recurring Deposits with quarterly compounding and real inflation adjustments.

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Deposit Settings

Monthly Deposit

₹

Interest Rate (p.a.)

*Most banks compound RD interest quarterly.

Tenure (Years)

Yrs

Adjust for Inflation

Expected Inflation Rate

Total Deposit

₹6,00,000

Over 5 Years

Nominal Maturity

₹7,13,658

Interest: +₹1,13,658

Real Value (Today's Power)

₹5,56,780

Purchasing power after 5 years

⚠️ Fixed Income Dilution:Your Recurring Deposit will pay out a nominal sum of ₹7,13,658. However, due to 5.09% annual inflation, that money will buy only what ₹5,56,780 buys today. RDs offer capital safety but do not grow real wealth.

Maturity Growth Pathway

Recurring Deposit (RD) Mechanics & Taxation

How Bank RDs Compound Interest

A Recurring Deposit is a term savings account where you deposit a fixed sum monthly. Unlike FDs where you invest a lump sum, RDs permit systematic periodic savings.

Under Indian banking rules, RD interest is compounded quarterly. This means interest earned in the first three months is added to your principal, and future interest is calculated on this cumulative amount. Because earlier months compound for a longer period than later deposits, the effective yield is slightly lower than a standard lump-sum FD.

Taxation & Real Yield Erosion

Interest Taxation:RD interest is fully taxable under "Income from Other Sources" at your standard income tax slab rate (e.g. up to 30% + cess). Banks deduct 10% TDS if the interest income exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).

The Inflation Impact: Since RD rates usually hover around 6-7%, after subtracting income tax (e.g. 30% slab reduces a 7% yield to a post-tax return of 4.9%) and factoring in 5% inflation, the real purchasing power return is often negative. RDs should be used strictly for short-term goals (under 3 years) rather than long-term retirement wealth accumulation.