RD Calculator

What the RD Calculator Does

This tool estimates what a recurring deposit will be worth at maturity. You pay in the same amount every month, each instalment earns interest for the time it stays in the account, and the tool adds it all up to a maturity figure, shown beside the total you deposit.

It is the quick way to see roughly how much an RD will return, compare different monthly amounts or terms, and understand how much of the maturity is interest versus your own deposits.

How It Works

In a recurring deposit, the first instalment earns interest for the full term and the last for just one month. The tool uses a simple-interest approximation: it works out the interest each deposit earns over its remaining months and sums them with the deposits.

That gives a maturity value of the total deposited plus the accumulated interest. The total invested is simply the monthly amount times the number of months, so the difference between the two is the interest the RD earns.

Methodology

1. Read the inputs. Take the monthly deposit, the interest rate and the term in years.
2. Count the months. Multiply the years by twelve for the number of instalments.
3. Add the interest. Apply simple interest to each deposit for its remaining months and sum it.
4. Show maturity and invested. Display the approximate maturity and the total amount deposited.

RD maturity (simple-interest approximation)

This is a simple-interest approximation. Banks generally compound recurring deposits quarterly, so the actual maturity is usually a little higher than this estimate.

Assumptions

• Interest is applied as a simple-interest approximation; real banks compound recurring deposits quarterly, so the actual maturity differs slightly.
• The interest rate is fixed for the whole term, and a deposit is made every month without a miss.
• The maturity is gross — before any tax such as TDS, which a bank may deduct on the interest earned.

Standards & references

• Recurring deposit — A savings product where you deposit a fixed amount every month for a set term and receive the principal plus interest at maturity. The interest rate is usually fixed when you open the RD.
• Simple-interest approximation — Each instalment is credited interest for the months it remains in the account. Summing those gives a close estimate, though it is not the bank's exact compounding method.
• Banks compound quarterly — Most banks calculate RD interest with quarterly compounding, like a fixed deposit. That makes the real maturity a little higher than a simple-interest estimate.

Accuracy & Limitations

The estimate is a good, close figure for planning: it captures how each monthly deposit earns interest for a decreasing number of months and sums to a realistic maturity.

It is a simple-interest approximation, not the bank's exact method. Because banks usually compound quarterly, the actual maturity is typically a little higher than this estimate. Use it as a guide and confirm the exact figure with your bank.

It assumes a fixed rate and an unbroken run of monthly deposits. A missed deposit, a penalty, or a rate change would alter the real maturity, none of which the estimate models.

The maturity is before tax. Interest on a recurring deposit is taxable and banks may deduct TDS, so your take-home maturity can be lower than the gross figure shown.

Real-World Use Cases

When to use it — and when not to

For the exact maturity, use your bank's own RD calculator, which applies its quarterly compounding. For the after-tax amount, subtract the applicable tax on the interest. This tool gives a close, gross estimate.

Frequently Asked Questions

References

• Recurring deposit (Wikipedia)
• Simple interest (Wikipedia)
• Compound interest (Wikipedia)

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