RD Calculator

A Recurring Deposit (RD) is a type of term deposit offered by banks and financial institutions where you deposit a fixed amount every month for a predetermined period. It's similar to a Fixed Deposit but allows for monthly contributions instead of a lump sum investment.

RD interest is calculated using compound interest with quarterly compounding. The formula used is: A = P × (1 + R/N)^(Nt), where A is the maturity amount, P is the monthly deposit, R is the annual interest rate, N is the compounding frequency (4 for quarterly), and t is the time period in years.

RD investments offer several advantages: regular savings habit formation, guaranteed returns, flexible deposit amounts, quarterly interest compounding, and the ability to start with small amounts. They're ideal for individuals who want to save regularly and earn fixed returns.

Yes, RD interest is taxable under the Income Tax Act. The interest earned is added to your total income and taxed according to your income tax slab. Banks also deduct TDS (Tax Deducted at Source) if the interest exceeds ₹40,000 in a financial year.

Yes, you can withdraw your RD before maturity, but it may involve penalties. Most banks charge a penalty of 1-2% on the interest earned if you break the RD before completion. Some banks also offer partial withdrawal options.