Recurring Deposit Calculator

Each monthly instalment is treated separately because each one stays invested for a different number of months. The first deposit grows for the whole tenure, the last for just a month. Interest is compounded quarterly, and the bank adds up the matured value of every instalment. So the final amount is the sum of all those individual growths, not one calculation on your total deposit.

Yes, the interest from a recurring deposit is fully taxable. It gets added to your total income and taxed at your slab rate, exactly like FD interest. There is no exemption just because you saved in small monthly amounts. Banks also deduct TDS once your yearly RD interest crosses the threshold, so the treatment matches a fixed deposit in almost every way.

Missing a payment is usually allowed but not free. Most banks charge a small penalty for each missed instalment, and repeated misses can lead the bank to close the RD early. To avoid this, set up an auto-debit from your savings account so the money moves on its own. Keep enough balance on the due date and you will never face a penalty.

Yes, you can close an RD early, but like an FD it comes with a penalty. The bank pays interest at a reduced rate for the period the money actually stayed, so your return shrinks. Some banks also offer a loan or overdraft against the RD balance, which lets you access cash without breaking the deposit and losing the interest you have built up.

It depends on your risk appetite. An RD gives a fixed, guaranteed return and zero market risk, good for short goals and safety. A SIP puts money in mutual funds, so returns can be higher over the long run but are not guaranteed and can fall. For a sure outcome in one to three years, an RD fits. For long-term wealth, many prefer SIPs.

Match it to your goal. RDs usually run from six months to ten years. For a near-term plan like a vacation or buying a phone, a one or two year RD works. For a bigger cushion, stretch it longer so the quarterly compounding has more time. Just make sure the monthly instalment is one you can pay comfortably for the full period without straining your budget.