Verified Calculation Methodology
Reviewed by CalculatorAll.online Financial Editorial Studio•Last Updated: August 8, 2026
How to use this Understanding Recurring Deposit (RD) Compounding calculator
A Recurring Deposit is a high-safety term deposit product offered by banks allowing investors to deposit a fixed amount every month for a set tenure while earning quarterly compound interest.
Key Calculation Assumptions
- Calculations assume fixed compounding frequencies unless custom compounding is selected.
- Results do not factor in unannounced statutory tax rate adjustments or customized bank penalty fees.
- Calculations serve educational decision-making and planning purposes.
Frequently Asked Questions (FAQs)
How is RD interest calculated in Indian banks?
Bank RDs compound interest quarterly using the statutory formula M = P * (1 + r/n)^(n*t). Each monthly installment earns interest for the remaining duration of the tenure.
Is RD interest taxable?
Yes, RD interest is fully taxable as per your individual income tax slab rates. Banks deduct 10% TDS if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).
Can I prematurely withdraw an RD?
Yes, premature closure is permitted by most banks subject to a small penalty (typically 0.5% to 1.0% lower interest rate).
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Financial Disclaimer: Calculations produced by CalculatorAll.online are estimates for informational and educational purposes only. Market interest rates, tax laws, and bank terms vary. These figures do not constitute personalized investment, legal, tax, or credit advice. Always consult a certified financial advisor before finalizing financial decisions.