Recurring Deposit (RD) Calculator
Your recurring deposit
Advanced options
Enter a monthly deposit
Add a monthly deposit, a tenure and a rate to see the maturity value.
Know what this estimate is based on
- Jurisdiction
- Interest arithmetic, which no statute governs; the deposit-insurance limits and the national rate context around it are federal and U.S.-only
- Rules and time period
- APYs and balances are the ones you enter, not live offers. FDIC and NCUA coverage limits and the FDIC national rate caps change independently of this page.
- Scope and limitations
- Projection only. Actual APY, posting dates, compounding method, minimum balances, withdrawal rules, penalties, fees and tax on the interest depend on the institution and your account agreement.
- Source links checked
- Sep 19, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the fixed monthly deposit you will pay into the recurring deposit each month.
- 02
Set the tenure, choosing how many months or years you will keep contributing.
- 03
Enter the nominal annual interest rate and pick the compounding frequency, using quarterly to match the usual bank convention.
- 04
Optionally layer on your tax rate on the interest, an inflation rate, a start date, or an early-withdrawal what-if to stress-test the plan.
- 05
Read the headline results: the maturity value, the total interest earned, and the effective annual yield.
- 06
Open the month-by-month schedule, compare scenarios, and use the save or export actions to keep and share your figures.
Formula
Each monthly installment is compounded from the month you pay it until the maturity date, earning the nominal annual rate spread across n compounding periods a year, so a single period earns rate/n and the yield you truly realize across a year is (1 + rate/n)^n - 1; the maturity value is simply the sum of every installment grown forward to that maturity date, which is why your earliest deposits — the ones that compound the longest — add the most interest.
Example
Pay $500 at the start of every month for 60 months at a 4.00% nominal rate compounded quarterly — roughly what a competitive US savings plan or add-on CD paid in 2026 — and you put in $30,000 of your own money over the term. By maturity that grows to $33,248.70, so you earn $3,248.70 in interest: a growth multiple of about 1.11x and an effective annual yield of 4.06%, higher than the 4.00% sticker rate because the interest itself keeps compounding. Enter a 24% tax rate on the interest and $779.69 goes to the IRS, leaving a net maturity of $32,469.01.
Definitions
- Recurring deposit (RD)
- A bank savings arrangement in which you commit to paying a fixed amount every month for a set term, earning a fixed interest rate; at the end you receive every installment back plus the interest they compounded along the way. US banks rarely sell this as a named product: the same plan is built from an automatic monthly transfer into a high-yield savings account, or from an add-on CD that accepts further deposits. Either way the rate is set by the bank rather than by a market.
- Monthly installment
- The fixed sum you pay into the RD on the same day each month for the whole tenure, forming the principal you build up. Every installment is identical in this calculator, and paying it at the start of the month rather than the end earns a little more because each payment sits and compounds for one extra month.
- Tenure
- The length of the deposit, measured as the number of months you keep paying installments before the account matures. A 5-year tenure means 60 monthly installments; the longer the tenure, the more compounding periods your earliest deposits pass through and the more they grow.
- Nominal interest rate
- The annual rate the bank quotes on the RD before the effect of compounding is counted. It is divided by the number of compounding periods to give the interest added each period, so once that interest compounds through the year the effective yield you actually receive sits a little above this headline figure.
- Effective annual yield (EAR)
- The true yearly return once compounding within the year is taken into account, worked out as (1 + rate/n)^n − 1 where n is the compounding frequency. At a 4.00% nominal rate compounded quarterly the effective yield is 4.060%, above the 4.000% you would get if interest were compounded only once a year.
- Compounding frequency
- How many times per year the accrued interest is capitalized — added to the balance so it begins earning interest itself. More frequent compounding lifts the payout: the same $500 paid monthly for 5 years at 4.00% grows to $33,202.06 compounded annually but $33,259.99 compounded monthly.
- Quarterly compounding
- The banking convention of capitalizing RD interest four times a year, every three months. Interest accrues month by month on the running balance and is added to principal at each quarter-end, which is the convention this tool uses — giving $33,248.70 on the worked example rather than the simpler textbook RD result.
- Maturity value
- The total amount the bank pays you when the RD ends: all the installments you contributed plus the compounded interest they earned. For $500 paid monthly for 5 years at 4.00% compounded quarterly, the maturity value is $33,248.70.
- Maturity date
- The date on which the agreed tenure completes and the bank pays out the RD. It marks the end point up to which all your installments have been accruing and compounding interest; once it is reached the balance stops growing and the maturity value is fixed.
- Total deposits
- The sum of every installment you have paid in over the tenure, excluding any interest — simply your monthly installment times the count of installments paid. In the worked example that is $500 × 60 = $30,000, which forms the principal portion of the maturity value.
- Interest earned
- The part of the maturity value that comes from interest rather than your own contributions, found by subtracting total deposits from the maturity value. On the worked example that is $33,248.70 − $30,000 = $3,248.70, a growth multiple of 1.11x on what you put in.
- Tax on the interest
- The interest is ordinary income — your deposits never are — and a US bank reports it on Form 1099-INT rather than withholding it, so you settle it at your marginal rate when you file. Applied here to the interest at maturity: 24% of the $3,248.70 is $779.69, cutting the net maturity to $32,469.01.
- Premature withdrawal penalty
- The reduced interest rate the bank applies if you close the RD before its tenure ends, so you receive less interest than a deposit run to maturity. Closing the worked example after 36 months with a 1% rate penalty pays $196,036.82, of which the penalty alone costs $3,088.87 compared with the full early-closure rate.
- Inflation-adjusted (real) value
- What the maturity amount is actually worth in today's purchasing power after discounting for inflation over the tenure. At 5% inflation, the $33,248.70 you receive in 5 years is equivalent to just $26,051.22 in today's money.
Good to know
How a recurring deposit works and grows
A recurring deposit is a bank product built around a single discipline: you commit to paying a fixed amount every month for a fixed number of months, and the bank pays you a fixed rate of interest on the growing balance. Unlike a fixed deposit, where you hand over one lump sum at the start, an RD lets you build a savings pot out of small, regular contributions. Each installment you pay becomes part of a running balance, and that balance earns interest for as long as it stays with the bank. Because your first installment sits in the account for the entire tenure while your last one is only there for a month, the early money does most of the heavy lifting. Consider the worked example this calculator uses throughout: $500 paid every month for five years is 60 installments, so you personally deposit $30,000. At a 4.00% annual rate compounded quarterly, that grows to a maturity value of $33,248.70. The difference between your $30,000 of contributions and that payout is $3,248.70 of interest, turning your contributions into roughly 1.18 times their deposited value without any market risk. The mechanism is simple to picture: every month your new installment lands, joins the pile, and the whole pile keeps accruing. Nothing is speculative, nothing is linked to shares or funds, and the rate is locked when you open the account. That predictability is the point of an RD. You know the monthly outflow, you know the tenure, and the calculator tells you the maturity figure in advance, so you can plan a goal such as a deposit, a fee, or a purchase around a number you can actually count on.
The compounding math: nominal rate versus effective yield
The rate you enter is a nominal annual rate, and it is not quite the same thing as the return you actually earn over a year. Compounding is the reason. When interest is added to your balance partway through the year, that freshly credited interest then earns a return of its own, so the yield you actually receive ends up a little higher than the headline rate. The formula for the effective yield is (1 + rate divided by n) raised to the power n, minus 1, where n is the number of times interest is compounded each year. Banks conventionally compound recurring deposits quarterly, meaning n is 4, and this calculator follows that convention by default. You can see the effect clearly by holding everything else fixed and only changing the compounding frequency. On $500 a month for five years at 4.00%, annual compounding produces $33,202.06 and an effective yield of exactly 4.000%. Move to semiannual and the maturity rises to $354,498.08 at an effective 4.040%. Quarterly, the bank standard, gives $33,248.70 at 4.060%. Monthly compounding pushes it further to $33,259.99 at an effective 4.074%. Every one of those uses the same 4.00% nominal rate; the only thing that changed is how often the interest was capitalized. Within each quarter interest accrues on the running balance in a simple way, and then at each compounding date it is capitalized, added to the principal so the next quarter starts from a higher base. That is why more frequent compounding always wins by a small margin. Importantly, this tool models the genuine bank quarterly-compounding convention rather than the old textbook shortcut that treats RD interest as a simple-interest sum, so the maturity figure reflects how a real deposit account behaves.
Why deposit timing changes the result
A detail that surprises many savers is that when in the month you pay matters. If you deposit at the start of each month, every installment gets credited earlier and therefore earns one extra month of interest compared with paying at the end of the month. The calculator lets you model both, and the difference is real money. Take the same plan of $500 a month for five years at 4.00% compounded quarterly. Paying at the start of every month produces a maturity of $33,248.91. Paying at the end of every month produces $33,138.60. That is a gap of $1,902.10, earned for no extra effort and no extra contribution, simply because each of your 60 installments spent slightly longer in the account. The logic compounds across the whole schedule: your first start-of-month deposit earns interest for a full extra month, and so does every deposit after it, and those small head starts add up over 60 months. In practical terms, if your salary lands early in the month and you can afford to fund the RD immediately rather than waiting until the last day, you capture that extra yield. The effect is larger the longer the tenure and the higher the rate, because there is more time and more interest for the head start to work on. It is a good illustration of a general savings principle: with compound interest, money that arrives sooner is always worth more than the same money arriving later. When you compare RD offers or plan your own contributions, treat the timing setting as a genuine lever rather than a rounding detail, because over a long tenure it quietly changes the number you walk away with.
Choosing a tenure and reading the rate
Two choices shape your maturity more than any other: how long you save for and the rate you lock in. Tenure works in your favor because compounding needs time. A longer commitment means each installment, and especially the early ones, spends more months accruing interest, so the interest share of your final balance grows disproportionately to the extra months. That is why stretching a goal from a short tenure to a longer one often adds more interest than you would expect from the additional deposits alone. The rate deserves equal scrutiny, and reading it correctly matters. The number a bank advertises is a nominal annual rate, so to compare two offers fairly you should look at the effective annual yield they produce once compounding is applied. In the running example a 4.00% nominal rate compounded quarterly delivers an effective 4.060%, and it is the effective figure that tells you what you truly earn. When you weigh one bank against another, a slightly higher nominal rate with less frequent compounding can lose to a slightly lower rate compounded more often, so the headline alone can mislead. Think about tenure in terms of the goal you are funding rather than a round number of years; set it to the month you actually need the money, since the calculator handles any whole number of months. Also remember that the rate is fixed for the life of the deposit once you open it, which is a strength when rates are falling and a mild drawback when they are rising. The calculator makes these trade-offs concrete: change the tenure or the rate and watch the maturity move, so you can find the combination that reaches your target without overcommitting your monthly budget.
Tax on your interest
Interest from a monthly deposit plan is ordinary income, taxable in the year your bank credits it. The tool models this through the tax rate you apply to the interest you earn, and it is important to understand exactly what the charge falls on. Tax is levied on the interest, never on your own installments; the money you deposited was already yours, so returning it is not a taxable event. Only the growth is taxed. A US bank does not withhold that tax: it reports the interest and passes it to the tax authority on your behalf, rather than leaving you to settle the whole bill later. In the worked example the deposit earns $3,248.70 of interest on top of the $30,000 you contributed. Apply a 24% tax to that interest and $779.69 is taken off, which reduces your maturity from $33,248.70 to a net figure of $32,469.01. Notice that the deduction is 10% of the interest, not 10% of the whole maturity, which is why the net stays far closer to the gross than a naive glance might suggest. This calculator applies the tax to the interest at maturity so you can see the after-tax number you will actually receive, which is the figure that should drive your planning. Real tax treatment varies by country and by your personal circumstances; thresholds, exemptions, and slab rates all play a part, so treat the tax setting as a way to model a scenario rather than a substitute for advice. The key takeaway is straightforward: the headline maturity is a pre-tax number, and building your goal around the net figure keeps you from over-estimating what lands in your account.
Premature withdrawal and the penalty
Life does not always run to schedule, and sometimes you need the money before the RD matures. Breaking a deposit early is called premature withdrawal, and it almost always comes at a cost. When you close early, the bank typically pays you a reduced rate rather than the rate you originally agreed, and often it is the rate that would have applied to the shorter period you actually kept the money, minus a penalty. The result is that you receive less interest than the schedule promised, sometimes considerably less. The calculator lets you model this so there are no surprises. Suppose you close the same $500-a-month deposit after 36 months instead of running the full 60, and a 1% rate penalty is applied to the early-closure rate. You would receive $196,036.82, of which $16,036.82 is interest on the installments you had paid in. The penalty itself, the difference between what you would have earned at the full early-closure rate and what you actually get after the 1% reduction, costs $3,088.87. That is the price of access. Seeing these numbers before you commit helps in two ways. First, it discourages you from locking away money you are likely to need, because the penalty erodes exactly the interest that made the RD attractive. Second, it helps you right-size the deposit so that your monthly installment is comfortable enough that you are not forced to break it. A useful habit is to keep a separate emergency buffer in an easily accessible account so the RD can run undisturbed to maturity. If you do foresee a possible early need, model the withdrawal at the likely month first, so you know what you would actually walk away with rather than assuming you would get the full projected maturity.
Monthly deposits versus a CD versus investing
A monthly deposit plan is one of three savings vehicles people often confuse, and choosing the right one depends on your cash flow and your appetite for risk. A recurring deposit suits someone who wants to save a fixed amount out of regular income, month after month, and earn a guaranteed bank rate on it; the running example turns 60 payments of $500 into a certain $33,248.70. A fixed deposit is different in one crucial respect: you commit a single lump sum at the outset rather than feeding the account monthly. If you already have a pool of money sitting idle, a fixed deposit generally earns more than the same total drip-fed through an RD, because the whole amount compounds from day one instead of arriving gradually. An RD, by contrast, is the tool for building a lump sum you do not yet have. An automatic investment plan into a mutual fund or ETF also takes regular monthly contributions and superficially resembles an RD, but the resemblance ends at the payment schedule. An investment plan is market-linked: its returns are variable, not guaranteed, and its value can fall as well as rise. It offers the prospect of higher long-run returns in exchange for accepting risk and volatility, whereas an RD offers certainty and capital protection with a modest, known rate. As a rough guide, use an RD or FD for money you cannot afford to lose or need by a specific date, such as a fee, a deposit, or a near-term goal, and consider an investment plan only for longer horizons where you can tolerate ups and downs. Many savers sensibly use both, an RD for the safe, dated portion of a plan and an investment plan for the growth-seeking portion, rather than treating the decision as all or nothing.
Inflation and the real value of your maturity
The maturity figure a calculator shows is a nominal amount, the actual number of dollars you will receive. What it does not tell you on its own is what that money will buy by the time you get it, and that is where inflation enters. Inflation is the gradual erosion of purchasing power: the same basket of goods costs more each year, so a fixed sum of money in the future is worth less in today's terms. The calculator lets you translate a future maturity back into present-day value so you can judge the real gain rather than the headline one. Return to the running example. The $33,248.70 you receive after five years, assuming 5% annual inflation over that period, is worth $26,051.22 in today's money. In other words, although your balance grew and you genuinely earned interest, a meaningful slice of the nominal gain is offset by the rising cost of living. This is not a reason to avoid saving; leaving the money uninvested would lose purchasing power without earning anything at all. It is a reason to be realistic about what the maturity achieves. The comparison that matters is between your effective yield and the inflation rate: when your yield comfortably exceeds inflation you are growing real wealth, and when it merely matches inflation you are preserving purchasing power rather than building it. For goals denominated in future prices, a college fee or a purchase whose cost will itself rise, planning against the inflation-adjusted figure keeps you honest about whether the deposit will actually cover the bill. Use the inflation setting as a reality check on every projection, so the number you plan around reflects real buying power and not just a larger count of dollars.
Working backward from a target
Most of the time you know your monthly budget and want to find the maturity, but often the more useful question runs in reverse: you fix the sum you want at maturity and ask which monthly installment reaches it. That is what the reverse mode is for. Instead of entering a deposit and reading off the result, you enter the maturity you need, the tenure you are willing to save over, and the rate and compounding you expect, and the calculator solves for the installment that lands you exactly on target. This flips the tool from a projector into a planner. Suppose your goal is to accumulate $1,000,000 over 120 months, and you expect a 7% rate compounded quarterly. The calculator works backward and tells you to deposit $5,756.87 every month. Armed with that figure you can sanity-check the plan against your actual budget: if the required installment is comfortable, you have a workable savings path; if it is too high, you can respond by lengthening the tenure, accepting a lower target, or hunting for a better rate, and immediately see how each change moves the required deposit. This backward approach is how disciplined goal-planning usually works in practice, because real goals tend to be defined by an amount and a date rather than by a spare monthly sum. It also makes trade-offs vivid. Because time and rate both do part of the work, giving the plan more months or a slightly higher yield reduces the monthly amount you must find from your own pocket. Use the reverse mode whenever a goal has a fixed price and deadline, and treat the installment it returns as the disciplined contribution that, kept up faithfully, delivers the number you actually need.
Limitations, assumptions and why the figure is an estimate
Every figure this calculator produces is a careful estimate, not a contractual promise, and it is worth understanding the assumptions behind it. The model assumes you pay every installment in full and on time, that the rate stays fixed for the whole tenure, and that interest is compounded on the schedule you selected, quarterly by default in line with normal bank practice. It calculates interest by accruing on the running balance within each compounding period and capitalizing at each compounding date, which mirrors how banks actually treat recurring deposits rather than the simpler textbook formula. Real accounts can differ in the details. A bank may round intermediate figures, apply its own day-count conventions, credit interest on slightly different dates, or treat a missed or late installment with a fee or a break in accrual, any of which can nudge the final number a little away from the projection. Tax is another source of divergence: the tool applies a single tax rate you choose to the interest, but actual liability depends on thresholds, exemptions, and rules that vary by jurisdiction and by your personal situation, so the after-tax figure is indicative rather than exact. The inflation adjustment assumes a constant annual rate, whereas real inflation fluctuates. Premature-withdrawal terms differ from bank to bank, so the penalty you model may not match a specific bank's policy. None of this undermines the calculator's usefulness; the estimates are close enough to plan confidently, compare offers, and set realistic goals. The right way to use the number is as a well-founded forecast that tells you what to expect and how your choices change the outcome, and then to confirm the precise terms with your bank before you open the account so there are no surprises at maturity.
Frequently asked questions
What is a recurring deposit, and how is it different from ordinary saving?
A recurring deposit (RD) is a bank deposit where you commit to paying a fixed amount every month for a set tenure at a fixed interest rate, and at maturity you receive every installment back plus the compounded interest it earned. It suits savers who want to build a lump sum out of steady monthly contributions rather than parking one large amount up front. Because the rate is locked in when you open the account, the return is guaranteed and does not drift with the market.
How is the maturity value calculated?
Each monthly installment begins earning interest from the month it is paid, and that interest is capitalized (added to the running balance) at every compounding date; banks conventionally compound RD interest quarterly. Because earlier installments compound for longer, they contribute more interest than later ones, so the total exceeds a flat simple-interest sum. For example, $500 paid at the start of each month for 60 months at 4.00% compounded quarterly grows to $33,248.70, of which $30,000 is your own deposits and $3,248.70 is interest.
Why is the effective yield higher than the rate I entered?
The rate you type in is a nominal annual rate, but interest is added several times a year and then itself earns interest, so the yield you actually realize ends up higher. The effective annual yield equals (1 + rate/n)^n − 1, where n is how many times a year interest compounds. At a 4.00% nominal rate the effective yield is 4.000% with annual compounding, 4.040% semi-annual, 4.660% quarterly, and 4.074% monthly — the more often interest capitalizes, the more you earn.
How does an RD differ from a fixed deposit?
A fixed deposit (FD) takes a single lump sum up front that earns interest for the whole term, whereas an RD is funded by many equal monthly installments. Because an FD has its full principal working from day one while an RD builds up gradually, the same rate over the same period earns less interest per dollar deposited in an RD. Choose an RD when you want to save out of monthly income, and an FD when you already have the lump sum on hand.
How is this different from investing the same amount every month?
Both take a fixed amount every month, but a deposit plan pays a bank interest rate the bank guarantees, while an automatic investment plan buys shares of a fund whose value rises and falls. The maturity value here is known the day you start; a fund's is not, and over five years it can end up worth considerably more or less. Bank deposits are also insured to $250,000 per depositor by the FDIC, or the NCUA at a credit union, which a fund is not. If you cannot tolerate the chance of a loss, take the deposit; if the money is for a goal a decade or more away, the market has historically paid more for the risk.
Is the interest taxable, and does the bank withhold it?
The interest is taxable as ordinary income, though the deposits you make are not — you already paid tax on that money. A US bank does not withhold anything: it reports interest of $10 or more on Form 1099-INT, sends a copy to the IRS, and leaves you to settle it at your marginal rate when you file. Backup withholding at 24% applies only if the bank never got your taxpayer ID. In this calculator a 24% rate on the $3,248.70 of interest removes $779.69, leaving a net maturity of $32,469.01, and the tax falls due year by year as the interest is credited rather than all at maturity.