Recurring Deposit (RD) Calculator

A Recurring Deposit (RD) is a special kind of term deposit offered by Indian banks which helps people with regular incomes to deposit a fixed amount every month into their RD account and earn interest at the rates applicable to Fixed Deposits.

It is a great tool for disciplined, low-risk saving for a specific goal, as it provides a guaranteed return.

The Formula Used (Future Value of Annuity)

The maturity amount of a Recurring Deposit is calculated using the formula for the future value of a series of regular payments (an annuity). Since deposits are made at the start of the month, we use the annuity due formula:

FV = P × ({[1 + i]^n – 1} / i) × (1 + i)

Where:

• FV is the Maturity Value.
• P is the monthly deposit amount.
• i is the monthly interest rate (annual rate / 12 / 100).
• n is the number of months (tenure in years × 12).

Note: While banks may compound interest quarterly, this calculation assumes monthly compounding for accurate estimation, which aligns with how most online financial calculators work.