Method, example and interpretation · Revised 16 October 2026
Why an RD does not earn interest on every deposit for the full term
A recurring deposit builds a balance gradually. The first instalment earns interest for much longer than the final instalment. This calculator values each monthly contribution separately, helping explain why applying a two-year return to all twenty-four deposits would overstate the result.
The deposit-by-deposit method
The annual rate is divided by four for quarterly compounding. For instalment m in a plan of N months, its modelled growth factor is (1 + annualRate/400)^((N − m + 1)/3). The maturity value is the sum of those instalment values. This assumes a contribution at the start of each month and allows fractional quarterly periods.
Compare like with like
Keep contribution size and term equal when comparing rates. The reported total return is interest divided by deposits, not an annualised yield: your deposits did not all remain invested for the entire term. The rate-comparison tab uses the same method as the main calculator and the savings page.
Allow for bank-specific rules
Banks can use different rounding, instalment dates and broken-quarter treatments. Missed instalments, premature closure, late fees and taxes are not included. Read the bank’s terms before choosing a deposit and check whether the quoted rate applies to your age and deposit amount.
Worked example
₹5,000 deposited monthly for 24 months at 6.5%.
Total deposited: ₹1,20,000. Modelled maturity: ₹1,28,425.
Only the first instalment receives the full two-year growth factor. Later contributions receive progressively less interest.
Questions about this tool
Why does my bank’s quote differ slightly?
Check the exact deposit date, interest-rounding policy and treatment of incomplete quarters. This projection does not replace the bank’s maturity quotation.