What is a Recurring Deposit?
A Recurring Deposit lets you save a fixed amount every month for a fixed tenure, usually 6 months to 10 years. The bank compounds interest on your monthly deposits, and you receive the full accumulated amount at maturity.
RDs are ideal for salaried people who want to build a corpus through disciplined monthly savings — effectively a forced savings plan that also earns interest.
How RD Interest is Calculated
RD interest is compounded quarterly, like FDs. Each monthly installment earns interest from the month it is deposited, so earlier installments earn more than later ones.
The maturity value is the sum of all installments plus the compounded interest on each. Because the average balance in an RD is roughly half the final corpus, the effective yield is slightly lower than an FD at the same rate.
RD vs FD: Which to Choose?
An FD suits you if you have a lump sum available today. An RD suits you if you want to build the same amount from monthly income — for example, saving ₹10,000 per month for 5 years instead of investing ₹6,00,000 at once.
Many savers use both: an RD to accumulate a target amount, then an FD to lock in that amount at a good rate once accumulated.
Plan Your RD Maturity
The maturity amount depends heavily on the rate and tenure. A ₹10,000 monthly RD at 7% for 5 years grows to about ₹7,17,000, while the same RD at 6% gives about ₹7,00,000.
Use our RD calculator to see your exact maturity amount for any monthly deposit, rate, and tenure — and compare it with an FD calculator to decide which fits your goal.