A Recurring Deposit (RD) is a guaranteed term deposit that lets you build wealth systematically through fixed monthly contributions. Whether you are searching for a Post Office RD calculator, SBI RD rates, or ICICI Bank returns, this calculator computes compound interest on monthly deposits ranging from ₹100 to ₹1,00,000+ across flexible tenures from 6 months to 10 years.
What Is an RD Calculator & How Does It Work?
An RD calculator estimates the final maturity value and total interest earned on your monthly recurring deposit.
Unlike a Fixed Deposit (FD) where a lump sum compounds from day one, an RD accepts monthly instalments where each instalment earns interest for the exact number of remaining months in the tenure.
The calculator models quarterly compounding interest across major Indian banks and Post Office schemes.
RD Calculator Examples: ₹500, ₹2,000, and ₹5,000 Per Month
Which Bank Offers the Highest RD Interest Rate in 2026?
Major public and private banks like SBI, HDFC, and ICICI Bank offer RD interest rates between 6.50% and 7.25% p.a.
for general citizens, with an additional 0.50% for senior citizens.
Small Finance Banks (such as Jana, Suryoday, and Equitas Small Finance Bank) lead RD yields with rates up to 8.20%–8.50% for regular citizens and up to 9.00% for senior citizens on select tenures.
All scheduled Small Finance Banks are covered under DICGC insurance up to ₹5 Lakh per depositor per bank.
Post Office RD vs Bank RD (ICICI, SBI, HDFC)
Post Office RD offers a fixed 5-year tenure with an interest rate of 6.70% p.a.
(compounded quarterly) backed directly by the Government of India with no upper deposit limit.
Bank RDs (such as SBI or ICICI Bank) offer greater tenure flexibility (6 months to 10 years), seamless mobile app integration, auto-debit features, and higher interest rates for senior citizens.
How to Generate ₹10,000 Monthly Income: RD vs MIS vs Monthly FD
Recurring Deposits do not pay out monthly interest — they compound funds until maturity.
To receive ₹10,000 every month in income, depositors use monthly payout instruments: 1.
Post Office Monthly Income Scheme (POMIS): Pays 7.4% p.a.
monthly.
However, individual accounts are capped at ₹9 Lakh (yielding ~₹5,550/month) and joint accounts at ₹15 Lakh (yielding ~₹9,250/month).
2.
Non-Cumulative Bank FD: To earn ₹10,000/month at a 7.0%–7.5% bank payout rate, you require an upfront lump sum deposit of approximately ₹16 Lakh to ₹17.5 Lakh.
RD vs FD vs SIP: Which Is Right for You?
An RD is ideal if you want to build a disciplined savings habit from regular monthly salary without needing a lump sum upfront.
An FD is better if you already have a lump sum, as the entire principal earns interest immediately.
Both carry zero market risk.
For long-term goals (7+ years), a Mutual Fund SIP historically outperforms both RDs and FDs by generating 12%–14% long-term CAGR against inflation.
Safety, DICGC Insurance & Tax Rules on RD Interest
- Bank RDs are insured up to ₹5 Lakh per depositor per bank by the RBI's Deposit Insurance and Credit Guarantee Corporation (DICGC).
- Post Office RDs carry a 100% sovereign guarantee.
- RD interest is fully taxable based on your income tax slab rate, and banks deduct 10% TDS if your total annual interest across accounts at that bank exceeds ₹40,000 (₹50,000 for senior citizens).
Frequently Asked Questions
What is the current Post Office RD interest rate?
The Post Office RD interest rate is 6.70% p.a., compounded quarterly for a mandatory 5-year tenure.
Which bank gives the highest interest on RD?
Small Finance Banks (like Jana, Suryoday, and Equitas) offer the highest RD rates up to 8.50% for general citizens and 9.00% for senior citizens. Large commercial banks (SBI, ICICI, HDFC) offer between 6.50% and 7.25% p.a.
How much maturity value will I get for ₹2,000 per month in SBI RD for 5 years?
At a 6.50% annual interest rate, depositing ₹2,000 monthly in an SBI RD for 5 years (total investment of ₹1,20,000) yields a final maturity amount of approximately ₹1,41,980.
Can I withdraw my RD before maturity?
Yes. Most commercial banks allow premature RD closure subject to a nominal penalty (usually 0.5% to 1.0% lower interest rate). Post Office RDs allow premature closure only after completing 3 years.
Is RD interest tax-free?
No. RD interest is fully added to your annual income and taxed at your applicable income tax slab rate. TDS applies if annual interest income exceeds ₹40,000 (₹50,000 for senior citizens).