What will my RD be worth?

How the maturity value is worked out

You pay the same deposit R at the start of every month for n months. The bank compounds interest every quarter at the yearly rate r, so one quarter multiplies money by (1 + i), where i = r ÷ 400.

A deposit that stays in the account for m months grows to R × (1 + i)^(m/3). Part quarters count as fractions of a quarter, as in the formula banks publish. The first deposit stays for all n months and the last one for 1 month, so the maturity value is:

M = R × [(1 + i)^(1/3) + (1 + i)^(2/3) + … + (1 + i)^(n/3)]

When n is a whole number of quarters q (n = 3q), this sum is the bank formula M = R × [(1 + i)^q − 1] ÷ (1 − (1 + i)^(−1/3)).

The calculator shows this month by month. Each month, the deposit is added first, then the balance grows by the monthly factor (1 + i)^(1/3). After n months the balance is exactly M.

The other results:

• Total deposited is R × n. Interest earned is M − R × n.
• Interest as a share of deposits is the interest ÷ the total deposited, as a percent. It is not a yearly rate.

Assumptions

• The term in years is turned into months and rounded to the nearest whole month (0.5 years is 6 months). A half month rounds up: 0.125 years (1.5 months) is 2 months, and 1.125 years (13.5 months) is 14.
• Every deposit is paid on time at the start of its month.
• The rate does not change. Tax (TDS) and early-withdrawal penalties are not included.
• Amounts show in dollars. The maths is the same in any currency.

Worked examples by hand

5,000 a month at 7.5% for 1 year. i = 7.5 ÷ 400 = 0.01875, n = 12 months = 4 quarters. M = 5,000 × (1.01875^4 − 1) ÷ (1 − 1.01875^(−1/3)) = 5,000 × 0.07713587 ÷ 0.00617300 = 62,478.46. You deposit 60,000, so the interest is 2,478.46.

1,000 a month at 7% for 5 years. i = 0.0175, n = 20 quarters. M = 1,000 × (1.0175^20 − 1) ÷ (1 − 1.0175^(−1/3)) = 71,932.79, of which 60,000 is deposits and 11,932.79 is interest.

10,000 a month at 5% for half a year. i = 0.0125 and n = 6 months. M = 10,000 × (1.0125^(1/3) + 1.0125^(2/3) + … + 1.0125^(6/3)) = 60,877.43.

5,000 a month at 0% for 1 year. Nothing grows, so M = 12 × 5,000 = 60,000.

Frequently asked questions

What is the minimum and maximum RD amount?

The minimum RD amount varies by bank. The maximum amount depends on the bank's policies. Use our recurring deposit calculator to plan your monthly deposits.

How does RD compare to other investment options?

RDs offer lower returns compared to equity investments but provide guaranteed returns and capital protection. They're safer than stocks but offer lower returns than mutual funds. RDs are ideal for conservative investors who prioritize safety over high returns. Use our recurring deposit calculator to compare RD returns with other investment options.

Can I take a loan against my RD?

Yes, most banks offer loans against RD accounts. You can typically borrow up to 80-90% of the RD balance. The interest rate on such loans is usually 1-2% higher than the RD interest rate. Our recurring deposit calculator helps you understand your RD balance for loan purposes.

What happens if I miss a monthly payment?

Missing a monthly payment may result in penalties or the RD being converted to a regular savings account. Some banks offer grace periods, while others may charge late fees. It's important to maintain regular payments to avoid penalties. Our recurring deposit calculator assumes regular monthly payments.

How do I choose the best RD scheme?

To choose the best RD scheme, compare interest rates across different banks, check for any additional benefits like loan facilities, consider the bank's reputation and service quality, and evaluate the flexibility in terms of premature withdrawal and loan against RD. Our recurring deposit calculator helps you compare different RD scenarios.