Is RD interest taxable?

Yes, at your slab rate. Banks deduct TDS under Section 393 (old section 194A) when total interest crosses ₹50,000 a year (₹1 lakh for senior citizens).

What happens if I miss an RD instalment?

Most banks charge a small penalty for a missed instalment, and several missed instalments can lead to the account being closed.

Can I close an RD early?

Yes, but banks usually pay a lower rate for premature closure, often 0.5–1% below the contracted rate.

Loans & Savings · Updated for tax year 2026-27

RD Calculator — Recurring Deposit Maturity

A recurring deposit’s maturity is the sum of each monthly instalment compounded quarterly for the time it stays invested: M = Σ R × (1 + r/4)^(months remaining ÷ 3). Enter your monthly deposit, interest rate and tenure to see the maturity amount and interest earned.

Enter your details

Values you enterComputed values

Monthly deposit

Interest rate

Tenure

Result

Maturity value

₹62,311

Total deposited₹60,000

Interest earned₹2,311

DepositsInterest

Disclaimer: Computed to the best of our knowledge, as per the law — including the section changes under the Income-tax Act, 2025 — in force on the date this website was last deployed (28 Sep 2026). Results are estimates for guidance only and are not tax, legal or investment advice. Please verify with the Act, rules and notifications, or a qualified professional, before relying on them. Rates and limits last reviewed on 28 Sep 2026.

How to use the RD Calculator

1
Enter the amount you will deposit every month.
2
Enter the annual interest rate offered by the bank or post office.
3
Enter the tenure in months (usually 6 months to 10 years; the post office RD is 5 years).
4
See the total deposited, the interest and the maturity value.

RD formula

Maturity = Σ (k = 1 to n) R × (1 + r/400)^((n − k + 1) ÷ 3)

R = monthly deposit · r = annual rate in % · n = number of months

Each instalment earns interest only for the months it stays in the account, so the first instalment earns the most. Like FD interest, RD interest is taxable at your slab rate and is subject to TDS above the threshold.

Worked example

₹5,000 a month for 12 months at 7% a year: you deposit ₹60,000.
The maturity value is ₹62,311 — interest of ₹2,311.

RD or SIP?

An RD gives a fixed, guaranteed return and suits short goals and cautious savers. A mutual fund SIP can earn more over long periods but its value moves with the market. Many people use an RD for goals under three years and a SIP for longer ones.

Frequently asked questions

Banks compound RD interest quarterly. Each monthly instalment earns interest for the number of months it remains deposited.