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Finance & InvestmentEntry № 01.12Documented Formula

Recurring Deposit (RD) Maturity Calculator

Evaluates maturity proceeds and accumulated interest from monthly recurring deposits compounded quarterly according to Indian banking norms.

Popular Searches:How much will I get on 5000 monthly RD for 3 years?Quarterly compounding RD formula explainedPost office recurring deposit maturity chartCalculate total interest earned on recurring deposit
Recurring Deposit (RD) Compounding Engine
$5,000.00 / mo
$
7.00%
%
3 Years
1 Yr3 Yrs5 Yrs10 Yrs
RD Maturity Summary
Maturity Value
$200,686.49
Across 36 monthly installments
Total Principal Deposited$180,000.00
Total Interest Accrued+$20,686.49
M = R · [((1+i)ⁿ - 1) / (1 - (1+i)⁻¹/³)]
Mathematical Proof & FormulaStandard Mathematical Notation

How This Calculation Formula is Formulated

A Recurring Deposit (RD) compounds monthly deposits on a quarterly basis according to the Indian Post Office and Reserve Bank of India formula. Each monthly installment earns interest for the remainder of the tenure, compounding at the end of each quarter.

Standard Algebraic Representation
M = R \cdot \left[ \frac{(1+i)^n - 1}{1 - (1+i)^{-1/3}} \right]
Documented algebraic formula with transparent derivation and reference notes.

Variable Definitions & Measurement Units

R
Monthly Installment
Fixed deposit made every calendar month
i
Quarterly Rate
Nominal annual rate divided by 4 (i = r / 4)
n
Total Quarters
Total tenure converted to quarters (Months ÷ 3)
Step-by-Step Calculation Example

Monthly Recurring Deposit of ₹5,000 for 3 Years at 7.0% p.a.

Monthly Deposit:₹5,000Rate:7.0% p.a.Tenure:36 Months (12 Quarters)
1
Total Principal Deposited
₹5,000 × 36 months = ₹1,80,000
Total cumulative capital invested.
2
Quarterly Compounding Formula Application
M = 5,000 × [((1 + 0.0175)¹² − 1) / (1 − (1 + 0.0175)⁻⁰·³³³)]
Where i = 0.07 / 4 = 0.0175.
3
Maturity Proceeds
M = ₹2,01,150
Total interest earned = ₹21,150.
Conclusion: Depositing ₹5,000 each month for 3 years at 7.0% yields ₹2,01,150 at maturity.
In-Depth Editorial Analysis

RD vs. SIP: Guaranteed Return vs. Market Risk

A Recurring Deposit provides 100% sovereign or bank-insured capital protection with fixed guaranteed interest, making it ideal for short-term goals (1 to 3 years) such as vacation savings or emergency funds.

In contrast, an equity mutual fund SIP fluctuates with market volatility but historically delivers higher long-term real returns (11–14% CAGR) for horizons exceeding 5 to 7 years.

Frequently Asked Questions

Frequently Asked Questions About Recurring Deposit (RD) Maturity Calculator

How does RD quarterly compounding work with monthly deposits?

Deposits made during a quarter earn proportional fractional-quarter simple interest, which is converted to compound principal at the end of every 3-month quarter.

Is interest earned on Recurring Deposits taxable?

Yes. RD interest is fully taxable under 'Income from Other Sources' at your marginal income tax slab rate, with TDS applicable if interest exceeds ₹40,000 in a financial year.

What happens if I miss an RD installment?

Banks typically charge a small penalty (e.g., ₹1.50 to ₹2.00 per ₹100 of installment) for delayed payments. Consecutive defaults may result in premature closure.

Can I take a loan against my RD account?

Yes. Most banks permit loans or overdraft facilities up to 80% to 90% of the accumulated RD balance at an interest rate 1% to 2% above the RD rate.

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Deterministic Precision & 100% Client-Side Privacy

All calculations execute in your local browser using IEEE 754 double-precision floating-point arithmetic. Your figures and financial metrics remain private and are never uploaded or saved to any cloud servers.