RD Calculator
A recurring deposit is a fixed deposit you fill monthly, and it is taxed the same way: annually, on interest you have not yet received. Because each instalment earns for a shorter period than the one before, the effective return sits below the quoted rate even before tax.
Where it goes
- What's actually left₹5.25 lakh
- Tax paid when you file−₹18,912
- Inflation at 6%−₹1.78 lakh
Worth knowing
How is the tax on this worked out?
Your other income puts you in a bracket, and this deposit's interest is stacked on top of it — so it is taxed at 15.6%, cess included. There is no separate lower rate for interest. Because we work from your income rather than a slab you pick, this also accounts for the rebate: below ₹12 lakh of total income the answer is nothing at all.
When is the tax on this actually paid?
Every year as the interest accrues — not at maturity, even though you do not receive a rupee until then. At your slab, ₹18,912 of the ₹1,21,230 interest goes in tax.
Will the bank deduct TDS?
No — your yearly interest stays under the threshold, so nothing is withheld. That is not the same as tax-free: the full liability is still yours, payable when you file.
Is 7.1% a good rate?
At your slab it is really 5.99% after tax. Against 6% inflation, that is what decides whether this deposit gains or loses purchasing power.
Compared with everything elseShow the tableHide
Over 15 years, Equity mutual fund keeps the most — +5.42% a year in real terms.
₹1.20 lakh a year into each, for 15 years, on ₹15.00 lakh of other income — a 15.6% rate on interest — and 6% inflation. The return is what you actually keep, after tax and after inflation.
| Where | Rate | Tax | You’d have | Real return |
|---|---|---|---|---|
| Equity mutual fund | 12.00% | Capital gains | ₹20.45 lakh | +5.42% |
| PPF | 7.10% | Completely tax-free | ₹13.58 lakh | +1.03% |
| NSC | 7.70% | Taxed at your slab | ₹13.11 lakh | +0.38% |
| Fixed deposit | 7.10% | Taxed at your slab | ₹12.60 lakh | +0.07% |
| Sukanya SamriddhiLocks your money in for 21 years | 8.20% | Completely tax-free | — | — |
Over 15 years, Equity mutual fund keeps the most — +5.42% a year in real terms — which is a different order from the one the headline rates suggest, because tax and lock-in do most of the deciding.
Understanding this calculator
A recurring deposit is a fixed deposit you fill one instalment at a time, and that difference does more to the return than most people expect.
Why the return looks lower than the rate
In a fixed deposit, the whole amount earns for the whole term. In a recurring deposit, only the first instalment does. The second earns for one month less, the third for two months less, and the final instalment earns for a single month.
So a five-year RD at 7% does not produce anything like a five-year FD at 7% on the same total money. Nothing is wrong — the average rupee has simply been invested for about half as long. This is the same arithmetic that makes a SIP's returns look modest against a lumpsum at the same rate.
Taxed like a deposit, not like a SIP
The monthly-instalment shape makes an RD feel like a SIP. For tax it behaves like a fixed deposit: interest is taxed as income at your slab rate, every year as it accrues, and TDS applies on the same thresholds.
There is no ₹1.25 lakh exemption here and no 12.5% rate — those belong to equity. If you are choosing between an RD and a monthly investment in an equity fund, the tax treatments are not comparable and the risk profiles are not either.
What an RD is genuinely good for is building a specific sum by a specific date out of monthly income, with no uncertainty about the outcome. For that job the modest return is the price of knowing the answer in advance.
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Tax rules applied as of 2026-Q2, last verified against official sources on 2026-08-23. This calculator does arithmetic on the figures you enter — it is not investment advice, not a recommendation, and not a forecast. All calculators