worldofcalcsRD Calculator
See what a monthly recurring deposit grows to. The Post Office 5-year RD pays 6.7% for October–December 2026.
What is a recurring deposit?
A recurring deposit (RD) lets you save a fixed amount every month and earn a fixed interest rate, like an FD built up in instalments. Banks offer RDs from 6 months to 10 years, and India Post offers a 5-year RD that currently pays 6.7% a year, set by the government each quarter. Interest is compounded every quarter and paid with your deposits at maturity. The rate is locked for the whole term when you open the account.
How the maturity value is calculated
Each monthly instalment P earns interest, compounded quarterly at r ÷ 4, for the months it stays in the account: the first instalment for the full term, the last one for a single month. Adding them up gives the maturity value. Bank and Post Office tables can differ by a few rupees from rounding.
Things to know about RDs
- The Post Office RD runs for 5 years, starts at ₹100 a month, and pays 6.7% for accounts opened in October–December 2026. The rate stays fixed for your full term.
- RD interest is fully taxable at your income tax slab rate, and an RD does not qualify for any tax deduction.
- Banks deduct TDS once your total interest from that bank crosses ₹50,000 in a year (₹1 lakh for senior citizens), counting FDs and RDs together.
- Missing an instalment usually costs a small penalty, and several missed instalments can lead to the account being closed or frozen.
- Closing an RD early normally earns a lower rate than promised.
- An RD suits short goals where you can't take risk. For goals five or more years away, an equity SIP has historically grown more, with ups and downs along the way.
Worked example: ₹5,000 a month in a Post Office RD
- ₹5,000 a month for 5 years (60 instalments) at 6.7% a year
- You deposit ₹3,00,000 in total
- Interest is compounded every quarter; the first instalment earns interest for all 60 months, the last for one month
- Maturity value: ₹3,56,829, of which ₹56,829 is interest
- In a bank RD of ₹5,000 a month for 2 years at 7%, you would get ₹1,29,099
RD maturity by monthly deposit
What different monthly deposits grow to, with quarterly compounding.
| Monthly deposit | Post Office: 5 years at 6.7% | Bank: 2 years at 7% | Bank: 3 years at 7% |
|---|---|---|---|
| ₹1,000 | ₹71,366 | ₹25,820 | ₹40,137 |
| ₹2,000 | ₹1,42,732 | ₹51,640 | ₹80,275 |
| ₹5,000 | ₹3,56,829 | ₹1,29,099 | ₹2,00,686 |
| ₹10,000 | ₹7,13,658 | ₹2,58,198 | ₹4,01,373 |
Bank rates vary; senior citizens usually get about 0.5% more.