How an RD works
A recurring deposit takes a fixed amount from your account every month for a chosen period and pays interest like a fixed deposit. Each instalment earns interest for the months it stays deposited; most banks compound quarterly.
Example
₹5,000 a month for 36 months at 7% a year matures at about ₹2,00,686, of which ₹1,80,000 is your deposits.
Good to know
- Interest on an RD is taxable, and TDS may apply.
- Missing instalments can attract a penalty.
- An RD is a good way to save for a known goal — and saving part of a big expense lowers how much you need to borrow. Plan the rest with the EMI calculator.