Formulas used by this calculator
Fixed Deposit (FD) Formula (Quarterly Compounded)
A = P × (1 + r / 400)4n
Recurring Deposit (RD) Formula
A = P × Σ [ (1 + r / 400)4 × (n - (i - 1)/12) ]
P: Deposit amount | r: Annual interest rate (%) | n: Tenure in years
FD vs RD — Key Differences
| Feature | Fixed Deposit (FD) | Recurring Deposit (RD) |
|---|---|---|
| Deposit Type | One-time lump sum | Monthly fixed amount |
| Ideal For | Those with surplus cash | Salaried individuals saving monthly |
| Minimum Amount | ₹1,000 | ₹500 per month |
| Interest Rate | 7% – 7.5% p.a. | 6.5% – 7% p.a. |
| Tenure | 7 days to 10 years | 6 months to 10 years |
| Compounding | Quarterly | Quarterly |
Sample FD Returns (₹1,00,000 at 7% p.a.)
| Tenure | Interest Earned | Maturity Value |
|---|---|---|
| 1 Year | ₹7,186 | ₹1,07,186 |
| 3 Years | ₹23,144 | ₹1,23,144 |
| 5 Years | ₹41,478 | ₹1,41,478 |
| 10 Years | ₹1,00,597 | ₹2,00,597 |
About Fixed Deposit vs Recurring Deposit
A Fixed Deposit (FD) allows you to park a lump sum amount for a fixed tenure at a guaranteed interest rate. A Recurring Deposit (RD) helps disciplined savers invest a fixed sum every month while earning guaranteed quarterly compounded interest. Both are safe, low-risk instruments offered by banks and NBFCs in India.
Taxation on FD and RD Interest
Interest earned on both FD and RD is fully taxable as per your income tax slab. Banks deduct TDS at 10% if the total interest exceeds:
- ₹40,000 per year for regular citizens
- ₹50,000 per year for senior citizens
If your total income is below the taxable limit, you can submit Form 15G (or 15H for seniors) to avoid TDS deduction.
How to use this calculator
- Choose whether you want to calculate for an FD (Lump sum) or RD (Monthly).
- Select your currency (INR, USD, GBP, EUR, AED).
- Enter your principal deposit amount.
- Enter the interest rate offered by your bank.
- Select the duration in years to view the total principal, earned interest, and maturity amount.
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Frequently asked questions
What is the difference between FD and RD?
A Fixed Deposit (FD) requires a one-time lump sum deposit, while a Recurring Deposit (RD) allows you to deposit a fixed amount every month. Both earn guaranteed interest at the bank's published rate.
How is FD interest calculated?
FD returns are calculated using the quarterly compound interest formula: A = P × (1 + r/400)^(4n), where P is principal, r is annual interest rate, and n is duration in years.
How is RD interest calculated?
RD returns accumulate interest on each monthly deposit based on quarterly compounding schedules mandated by standard Indian banking norms.
Which is better, FD or RD?
FD is better if you have a lump sum amount ready to invest. RD is better if you want to build savings gradually through monthly deposits. Both offer guaranteed returns, and the choice depends on your cash flow.
Is FD interest taxable?
Yes. FD interest is fully taxable as per your income tax slab. Banks deduct TDS at 10% if interest exceeds ₹40,000 per year (₹50,000 for senior citizens).
Can I withdraw FD before maturity?
Yes, most banks allow premature FD withdrawal, but they usually charge a penalty of 0.5% to 1% on the applicable interest rate. Some tax-saver FDs have a 5-year lock-in with no premature withdrawal option.
What is the minimum amount for FD and RD?
Most banks require a minimum FD of ₹1,000 and a minimum RD monthly deposit of ₹500 or ₹1,000. Some banks have higher minimums.