Recurring Deposit (RD) Calculator
Calculate your exact bank or Post Office RD maturity amount, total interest earned, and Section 194A TDS implications with official RBI quarterly compounding mechanics.
RD Deposit Details
RBI Quarterly Standard₹1,80,000
₹20,686
Understanding the Indian Bank Recurring Deposit (RD) Standard
How the RBI quarterly compounding formula determines maturity payouts for monthly depositors.
1. The RBI Quarterly Compounding RD Formula
Unlike simple interest savings, Indian banks calculate RD interest using quarterly compounding where each monthly installment behaves as an independent fixed deposit running for its remaining tenure:
M = Σ [ P × (1 + r/400)^(4 × (N - k + 1)/12) ] for k = 1 to N
Where: M = Maturity Amount, P = Monthly Installment (₹), r = Annual Rate (%), N = Total Tenure (Months), k = Installment Number
2. Recurring Deposit vs. SIP vs. Fixed Deposit
| Feature | Recurring Deposit (RD) | Fixed Deposit (FD) | Mutual Fund SIP |
|---|---|---|---|
| Deposit Frequency | Monthly installment | One-time lump sum | Monthly or quarterly |
| Risk Profile | Zero risk (DICGC insured up to ₹5L) | Zero risk (DICGC insured up to ₹5L) | Market-linked returns |
| Expected Returns | 6.5% - 7.5% p.a. fixed | 6.8% - 7.6% p.a. fixed | 12% - 15% CAGR (historical equity) |
| Taxation | Taxable at slab rate + 10% TDS | Taxable at slab rate + 10% TDS | 12.5% LTCG above ₹1.25L exemption |
3. Section 194A TDS Rules on Recurring Deposits
Interest accrued on RDs is combined with FD interest earned across all branches of the same bank:
- Regular Citizens: 10% TDS applies if combined interest exceeds ₹40,000 per financial year.
- Senior Citizens (60+): The exemption ceiling is ₹50,000 under Section 80TTB.
- Non-PAN Accounts: TDS rate surges to 20% if valid PAN is not linked to your bank account.
Frequently Asked Questions on Recurring Deposits
Detailed answers on bank RD interest formulas, tax thresholds, and senior citizen benefits.
How is interest calculated on Recurring Deposits in India?
Is TDS deducted on Recurring Deposit interest?
How can I avoid TDS on my Recurring Deposit?
What is the minimum tenure for an RD in India?
What happens if I miss an RD monthly installment?
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