How to use the RD Calculator
- Enter the amount you'll deposit every month.
- Enter the interest rate offered by your bank or post office.
- Enter the tenure in years and months.
Formula
M = Σ R × (1 + r ÷ 4)^(m ÷ 3)
- R:
- monthly instalment
- r:
- annual interest rate ÷ 100
- m:
- months the instalment stays deposited
How RD interest is calculated
Each monthly instalment earns interest only for the time it stays deposited. Your first instalment earns interest for the full tenure, your last one for a single month. Banks and India Post compound RD interest every quarter, which gives slightly more than simple interest.
Maturity = Σ R × (1 + r/4)^(m ÷ 3)
summed over every instalment, where m = months that instalment stays deposited
Worked examples
| Monthly deposit | Rate | Tenure | Deposited | Maturity | Interest |
|---|---|---|---|---|---|
| ₹10,000 | 6.7% | 5 years | ₹6,00,000 | ₹7,13,658 | ₹1,13,658 |
| ₹5,000 | 7% | 3 years | ₹1,80,000 | ₹2,00,686 | ₹20,686 |
| ₹5,000 | 7% | 1 year | ₹60,000 | ₹62,311 | ₹2,311 |
RD vs SIP vs FD
- RD: fixed monthly deposit, guaranteed rate for the tenure. Good for disciplined saving towards a fixed goal.
- FD: a lump sum at a guaranteed rate. Use the FD Calculator.
- SIP: monthly investment in mutual funds — potentially higher returns but not guaranteed. Use the SIP Calculator.
Worked example
₹10,000 a month for 5 years at 6.7%
- 60 instalments, deposited ₹6,00,000
- Each instalment compounds quarterly for the months it remains
Maturity ≈ ₹7,13,658 (interest ≈ ₹1,13,658)
Important notes
- RD interest is taxable at your slab rate, and banks may deduct TDS if your interest crosses the threshold.
Frequently asked questions
What is the Post Office RD interest rate now?
6.7% a year, compounded quarterly, for the 5-year Post Office RD (October–December 2026). The government reviews it every quarter.
What happens if I miss an RD instalment?
Banks and the post office usually charge a small penalty for each missed instalment, and several missed instalments can lead to the account being closed. Check your bank's rules.
Is RD better than FD?
For the same rate, an FD earns more because the whole amount is invested from day one. An RD suits you if you're saving from monthly income rather than investing a lump sum.
Sources and review
Last reviewed on by the BizToolsIndia editorial team. Official references:
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