Question 1

What is a Recurring Deposit (RD)?

Accepted Answer

A Recurring Deposit is a savings instrument offered by banks and post offices where you deposit a fixed amount every month for a fixed tenure at a predetermined interest rate. At maturity, you receive the total of all installments plus the accumulated interest. RDs are ideal for disciplined, goal-based saving.

Question 2

How is RD maturity calculated?

Accepted Answer

RD interest is compounded quarterly. Each monthly installment earns interest for the remaining months until maturity. The maturity value is M = Σ P × (1 + r/4)^((remaining months) / 3), where P is the monthly deposit and r is the annual interest rate as a decimal. Total interest = maturity − total deposited.

Question 3

How often is RD interest compounded?

Accepted Answer

As per RBI's Master Direction on interest rates, recurring-deposit interest is compounded at quarterly rests (every 3 months), the same as fixed deposits. Banks such as SBI, HDFC, and ICICI, as well as India Post, follow quarterly compounding for RDs.

Question 4

What is the difference between an RD and an FD?

Accepted Answer

In a Fixed Deposit (FD) you invest a lump sum once and it grows for the full tenure. In a Recurring Deposit (RD) you invest a fixed amount every month. Because RD installments are added gradually, each installment earns interest for a shorter period, so an RD earns less total interest than an equivalent lump-sum FD for the same total amount and rate.

Question 5

How does an RD differ from a SIP?

Accepted Answer

An RD is a bank deposit with a fixed, guaranteed interest rate and quarterly compounding, so returns are assured. A SIP invests in mutual funds where returns are market-linked and not guaranteed. RDs carry lower risk and lower expected returns; SIPs carry market risk with potentially higher long-term returns.

Question 6

Is my data sent to any server?

Accepted Answer

No. All calculations happen entirely in your browser using JavaScript. No data is sent to any server.

RD Calculator

Frequently Asked Questions

RD Calculator

Frequently Asked Questions