💰 FD vs RD Calculator
Realistic maturity calculation based on Indian bank interest crediting.
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FD & RD Tax and TDS Explained (FY 2025-26 / AY 2026-27)
1) Is FD or RD interest taxable?Yes. Interest earned from both Fixed Deposit and Recurring Deposit is treated as "Income from Other Sources". It is added to your total yearly income and taxed according to your income tax slab (0%, 5%, 20%, 30% etc).
2) What is TDS then?
TDS is not extra tax. It is only an advance deduction made by the bank and sent to the Income Tax Department in your name.
3) When will the bank deduct TDS?
The bank deducts TDS only if your total interest from that bank in one financial year crosses:
- ₹40,000 OR 50,000 – Regular individuals
- ₹1,00,000 – Senior citizens
• 10% if PAN is submitted
• 20% if PAN is not submitted
Important: Even if TDS is deducted, you may still get it back as a refund while filing your Income Tax Return.
4) How to avoid TDS deduction?
If your total income is below the taxable limit, submit:
- Form 15G – Individuals below 60
- Form 15H – Senior citizens
5) Extra benefit for senior citizens
Under Section 80TTB, senior citizens can claim deduction up to ₹50,000 on interest income from bank deposits.
Simple Understanding:
FD/RD interest = taxable income.
TDS = only advance deduction, not final tax.
Calculator Disclaimer
Indicative Returns:The maturity values shown are estimates to understand how deposits grow. Actual maturity may vary slightly due to bank rounding methods, leap year days, or bank-specific credit policies.
Interest & Compounding:
Calculations assume quarterly compounding, which is the standard practice followed by most Indian banks. Some banks may use daily accrual with quarterly credit, causing small differences.
Tax & TDS:
Interest from both FD and RD is taxable under “Income from Other Sources”. Banks deduct TDS only when yearly interest crosses the prescribed limit (generally ₹50,000 for individuals and ₹1,00,000 for senior citizens). TDS is only an advance deduction — your final tax depends on your income slab and may be refunded when filing your Income Tax Return (ITR).
Not Financial Advice:
This tool is for educational and estimation purposes only. Always confirm interest rates, tenure rules, and premature withdrawal penalties with your bank before investing.
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What is FD and RD?
The two most widely used bank savings methods in India.
In 2026, Fixed Deposits (FD) and Recurring Deposits (RD) continue to remain the preferred savings options for households that want stable and predictable returns. Unlike market investments, bank deposits protect the principal amount and provide known maturity value in advance.
Banking data shows total deposits in India crossed ₹253.77 lakh crore by December 2025. Out of this, time deposits — which include FD and RD — alone formed ₹220.49 lakh crore, meaning a majority of savings still goes into traditional deposits.
RBI deposit statistics report59%
Savings held in term deposits
10.6%
Deposit growth FY 2024-25
60.2%
Household investors
72.7%
Deposits earning 7%+ interest
Fixed Deposit (FD)
A Fixed Deposit is a one-time lump sum investment kept in a bank for a chosen tenure. The bank locks the interest rate at the time of opening, and it normally stays unchanged until maturity.
Practical Example:
If ₹1,20,000 is invested for 2 years at 7.5%, the entire ₹1,20,000 earns interest from the first day itself. Because the full amount works for the complete period, FD usually produces higher maturity than gradual savings.
If ₹1,20,000 is invested for 2 years at 7.5%, the entire ₹1,20,000 earns interest from the first day itself. Because the full amount works for the complete period, FD usually produces higher maturity than gradual savings.
FD rates depend on RBI monetary policy and bank liquidity conditions.
You can check latest FD rates here:
Check latest FD rates here
Tenure
Available from 7 days to 10 years.
Withdrawal
Premature withdrawal allowed with small penalty.
Loan Facility
Banks usually provide loan up to 90%–95% of FD value.
2026 Trend
Rates relatively stable due to steady policy rates.
FD is commonly used for retirement funds, bonus income, property sale proceeds, and emergency reserve parking.
Recurring Deposit (RD)
A Recurring Deposit is a monthly saving plan where a fixed amount is deposited every month for a selected tenure. Instead of investing at once, the savings grow gradually over time.
Practical Example:
Saving ₹5,000 every month for 5 years means total investment ₹3,00,000. Early installments earn interest for many years while later installments earn for shorter duration. Therefore RD maturity normally remains slightly lower than FD for the same total invested amount.
Saving ₹5,000 every month for 5 years means total investment ₹3,00,000. Early installments earn interest for many years while later installments earn for shorter duration. Therefore RD maturity normally remains slightly lower than FD for the same total invested amount.
Investment Method
Fixed monthly installment.
Interest Rates
Generally around 6.0%–7.5% in major banks.
Accessibility
Can start with small amount.
Post Office RD
5-year scheme, about 6.7% interest.
RD works best for salaried earners who want disciplined saving for education, travel, or planned purchases.
Difference Between FD and RD (FD vs RD)
Both are safe bank deposits. The main difference is not safety — it is how your money enters the bank and how long each rupee stays invested.
Investment Structure
Fixed Deposit (FD)
One-time lump sum invested at the beginning.
Recurring Deposit (RD)
Money deposited every month in fixed installments.
Tenure Range
FD
Available from as short as 7 days up to 10 years.
RD
Normally minimum 6 months and up to 10 years (Post Office RD fixed 5 years).
Return Behaviour
FD
Higher maturity for the same total money because the full amount earns interest from day one.
RD
Slightly lower maturity because money enters slowly and later installments get less time to grow.
Liquidity
FD
Better for short-term parking. Can withdraw early with small penalty.
RD
Requires monthly commitment. Missing installments may attract penalty.
Interest Payout
FD
Monthly, quarterly, yearly, or at maturity depending on option.
RD
Interest generally paid only at maturity.
Minimum Investment
FD
Usually ₹1,000–₹10,000 depending on bank.
RD
Can start with very small monthly amount (even around ₹100 in some schemes).
Loan Facility
FD
Loan easily available up to about 90–95% of deposit value.
RD
Loan possible but less common and more restricted.
Best Suitable For
FD
Surplus funds, bonus income, retirement money, emergency reserve.
RD
Monthly salary savings, planned purchases, fee or travel planning.
Core Understanding:
FD works like storing a full tank of water in a reservoir — it starts supplying immediately. RD works like filling a tank slowly every month — safe and steady, but slower growth.
FD works like storing a full tank of water in a reservoir — it starts supplying immediately. RD works like filling a tank slowly every month — safe and steady, but slower growth.
Easemoney Real-Life Tip:
If you already have the full money available, choosing RD instead of FD usually reduces your final maturity. But if you do not yet have the amount and you are saving from salary, forcing yourself into FD planning often fails — people withdraw early. In practice, successful savers first build discipline with RD, then later shift to FD once a lump sum becomes available.
If you already have the full money available, choosing RD instead of FD usually reduces your final maturity. But if you do not yet have the amount and you are saving from salary, forcing yourself into FD planning often fails — people withdraw early. In practice, successful savers first build discipline with RD, then later shift to FD once a lump sum becomes available.
How FD and RD Interest Rates Actually Work (2026)
Both Fixed Deposits and Recurring Deposits give guaranteed returns, but banks calculate interest differently in each case.
In India, most banks follow quarterly compounding for deposit maturity values. This means interest is calculated periodically and then added back to your deposit so future interest also earns interest.
1) Fixed Deposit (FD) Interest Calculation
In an FD, interest is calculated on the entire deposit from the first day. Because the full principal stays invested for the whole tenure, the compounding effect becomes strong over time.
Cumulative FD
Interest is added to the principal every quarter.
You earn “interest on interest,” which increases maturity value.
Non-Cumulative FD
Interest is paid monthly or quarterly as regular income instead of reinvesting.
Key Understanding:
In FD, every rupee stays invested for the entire duration. That is why FD generally produces the highest maturity value when the total invested money is the same.
In FD, every rupee stays invested for the entire duration. That is why FD generally produces the highest maturity value when the total invested money is the same.
2) Recurring Deposit (RD) Interest Calculation
In an RD, the bank does not calculate interest on one big amount. Each monthly installment is treated like a separate small deposit.
The first installment earns interest for the full tenure, but the last installment earns interest only for a short period. Because money enters gradually, the effective return becomes lower than an FD of the same total amount.
Important:
RD does not give lower interest rate — it gives lower maturity because time invested is shorter for later installments.
RD does not give lower interest rate — it gives lower maturity because time invested is shorter for later installments.
Typical Interest Rate Ranges (2026)
| Institution Type | FD Rates (General) | RD Rates (General) |
|---|---|---|
| Post Office | ~6.9% – 7.5% | ~6.7% (5-year scheme) |
| Major Banks | ~3.0% – 7.25% | ~4.5% – 7.1% |
| Small Finance Banks | ~7.0% – 8.6% | ~7.0% – 8.5% |
Tenure and Investment Limits
FD Tenure
7 days to 10 years.
Most deposits are opened for 1–3 years because banks usually offer the best rates in this range.
RD Tenure
6 months to 10 years.
Post Office RD is fixed at 5 years.
Minimum Investment
FD generally starts around ₹1,000.
RD can start with very small monthly amounts (around ₹100 in some schemes).
Maximum Limit
Regular bank deposits usually have no upper limit for investment.
Important Rules About Rates
If you close an FD or RD before maturity, banks usually pay interest only for the actual time stayed, and a small penalty may apply.
Bank deposits are considered safe savings instruments.
Bank deposits are insured up to ₹5 lakh per bank under deposit insurance protection.
FD and RD – All Charges & Tax Explained (2026)
Both deposits are taxed the same in India. What changes is how the interest is earned — not how it is taxed.
Interest earned from Fixed Deposits and Recurring Deposits is treated as normal income. It is added to your yearly earnings (salary, business income, pension etc.) and taxed according to your income tax slab.
Very Important Understanding:
Tax = Your final liability based on your income slab.
TDS = Only advance tax deducted by the bank on behalf of the government.
TDS is not extra tax. While filing Income Tax Return (ITR), the deducted TDS is adjusted. You either pay the remaining tax or receive a refund.
Tax = Your final liability based on your income slab.
TDS = Only advance tax deducted by the bank on behalf of the government.
TDS is not extra tax. While filing Income Tax Return (ITR), the deducted TDS is adjusted. You either pay the remaining tax or receive a refund.
Tax on Interest
FD
Entire interest added to your total annual income.
RD
Same rule — entire interest added to your total annual income.
TDS Deduction Rule
FD
10% TDS deducted when yearly interest from that bank crosses ₹50,000.
RD
Same rule applied. Interest from all branches of the same bank is combined.
Premature Withdrawal Charges
FD
Interest rate reduced by about 0.5%–1% if closed early.
RD
Penalty applied and interest recalculated for actual period.
Missed Payment Charges
FD
No penalty — paid only once.
RD
Late installment penalty (approx ₹1–₹2 per ₹100).
Real Indian Example — ₹5,00,000 for 5 Years @ 7% (20% Tax Slab)
Scenario 1: Fixed Deposit
Deposit: ₹5,00,000 lump sum
Interest earned: ≈ ₹2,07,000
Bank TDS (10%): ≈ ₹20,700 deducted automatically
Remaining tax while filing ITR: ≈ ₹20,700
Final profit after tax: ≈ ₹1,65,000
Scenario 2: Recurring Deposit
Monthly deposit: ₹8,333 for 60 months
Total interest: ≈ ₹98,500
Bank TDS: ≈ ₹9,850
Remaining tax payable in ITR: ≈ ₹9,850
Final profit after tax: ≈ ₹78,800
Why difference?
In FD the entire ₹5 lakh stays invested for full 5 years. In RD most installments remain invested for shorter time.
Scenario 1: Fixed Deposit
Deposit: ₹5,00,000 lump sum
Interest earned: ≈ ₹2,07,000
Bank TDS (10%): ≈ ₹20,700 deducted automatically
Remaining tax while filing ITR: ≈ ₹20,700
Final profit after tax: ≈ ₹1,65,000
Scenario 2: Recurring Deposit
Monthly deposit: ₹8,333 for 60 months
Total interest: ≈ ₹98,500
Bank TDS: ≈ ₹9,850
Remaining tax payable in ITR: ≈ ₹9,850
Final profit after tax: ≈ ₹78,800
Why difference?
In FD the entire ₹5 lakh stays invested for full 5 years. In RD most installments remain invested for shorter time.
Easemoney Practical Advice:
Do not choose FD only for higher returns if you may need the money early. Breaking an FD in the middle often cancels a large portion of interest. For uncertain savings, RD or staggered smaller FDs usually works better in real life.
Do not choose FD only for higher returns if you may need the money early. Breaking an FD in the middle often cancels a large portion of interest. For uncertain savings, RD or staggered smaller FDs usually works better in real life.
FD or RD — Which Should You Choose?
Neither option is universally better. The correct choice depends on whether you already have money or you are still building it.
Choose Fixed Deposit (FD) if
- You already have a lump sum amount
- You received bonus, sale proceeds, or maturity money
- You want maximum possible maturity value
- You need regular monthly interest income
- You are retired or near retirement
Choose Recurring Deposit (RD) if
- You save from monthly salary
- You want to build a disciplined saving habit
- You are planning future expenses (fees, travel, purchase)
- You cannot invest a large amount at once
- You are just starting your financial planning
Real Example:
Suppose you want to save ₹1,20,000 over 5 years at 7.5%.
FD: Deposit ₹1,20,000 once → maturity ≈ ₹1.71 lakh
RD: Deposit ₹2,000 every month → maturity ≈ ₹1.44 lakh
Reason: In FD the entire amount earns interest for the full 5 years, while in RD each installment gets different time to grow.
Suppose you want to save ₹1,20,000 over 5 years at 7.5%.
FD: Deposit ₹1,20,000 once → maturity ≈ ₹1.71 lakh
RD: Deposit ₹2,000 every month → maturity ≈ ₹1.44 lakh
Reason: In FD the entire amount earns interest for the full 5 years, while in RD each installment gets different time to grow.
Easemoney Practical Guidance:
If the money is already lying idle in a savings account, delaying and putting it into RD usually reduces returns. But if you do not yet have the amount, waiting to accumulate a lump sum often fails — people spend it. In practice, disciplined investors start with RD and later shift to FD once savings accumulate.
If the money is already lying idle in a savings account, delaying and putting it into RD usually reduces returns. But if you do not yet have the amount, waiting to accumulate a lump sum often fails — people spend it. In practice, disciplined investors start with RD and later shift to FD once savings accumulate.
What is FD & RD Calculator?
A planning tool that estimates how much your savings can grow before you actually invest money.
An FD (Fixed Deposit) Calculator and RD (Recurring Deposit) Calculator are digital tools that estimate the maturity amount and interest earned on your savings. Instead of manually calculating compound interest, the calculator instantly shows the future value of your deposit based on amount, interest rate, and tenure.
The purpose is not to replace the bank — but to help you plan in advance. You can decide how much to save and how long to invest before opening the deposit.
FD Calculator
Used when you invest one lump sum amount at once. It calculates how that amount grows over time with compounding interest.Main inputs:
- Total deposit amount
- Interest rate
- Investment period
RD Calculator
Used when you invest a fixed amount every month. It estimates how monthly savings accumulate over the selected tenure.Main inputs:
- Monthly installment
- Interest rate
- Number of years
Why people use calculators:
They help you check how small changes in amount or tenure affect the final maturity. This allows goal planning — for example education fees, buying a vehicle, or building an emergency fund.
They help you check how small changes in amount or tenure affect the final maturity. This allows goal planning — for example education fees, buying a vehicle, or building an emergency fund.
How the Easemoney FD vs RD Calculator Works
The Easemoney calculator does not use a simplified school formula. It follows the practical banking method used in India.
- FD maturity is calculated using quarterly compounding (standard bank method).
- RD maturity treats every monthly installment as a separate deposit.
- Earlier installments earn interest for longer time, later installments for shorter time.
- The comparison mode converts a lump sum into an equivalent monthly saving to show real difference.
Important:
Banks calculate interest daily and credit it quarterly. Because of day count and rounding, the bank maturity may differ slightly by a few rupees. The calculator is meant for accurate estimation and planning before investing.
Banks calculate interest daily and credit it quarterly. Because of day count and rounding, the bank maturity may differ slightly by a few rupees. The calculator is meant for accurate estimation and planning before investing.
FD & RD Frequently Asked Questions
What is RD ₹1000 per month for 5 years?
If you deposit ₹1,000 every month for 5 years at around 7%, total investment becomes ₹60,000 and maturity comes roughly ₹70,000 to ₹72,000 depending on bank calculation and rounding method.
What is 7% interest for ₹1 lakh FD?
At 7% yearly interest, ₹1,00,000 FD earns about ₹7,000 in one year. With compounding for 5 years, maturity becomes around ₹1.40 lakh to ₹1.42 lakh depending tenure and credit cycle.
Which bank gives around 7% interest on RD?
In 2026 many Indian banks including SBI, HDFC, ICICI and small finance banks offer approximately 6.5% to 7.5% RD interest for 2 to 5 year tenure. Rates change quarterly.
FD RD full form meaning?
FD means Fixed Deposit where money is invested one time. RD means Recurring Deposit where you save monthly. Both are safe bank savings options with guaranteed interest return.
FD vs RD vs SIP which is better?
FD and RD are safe fixed return deposits. SIP is market linked and risky but higher long term return possible.
See full comparison in our FD vs SIP return calculator for practical understanding.
FD vs RD vs PPF difference?
FD and RD are bank deposits with flexible tenure. PPF is government scheme for 15 years lock-in. PPF gives tax benefit and safety but lower liquidity compared to deposits.
Is FD safe in India?
Yes, bank deposits are insured up to ₹5 lakh per bank under deposit insurance. Government banks considered safer but even private banks follow RBI regulation and supervision rules strictly.
Can I withdraw RD anytime?
You can close RD early but bank recalculates interest for shorter period and charges penalty. So maturity becomes lower than expected. Better continue full tenure whenever possible.
Which gives more money FD or RD?
FD usually gives higher maturity because full amount stays invested entire time. In RD, later installments stay shorter duration so total interest earned becomes comparatively lower.
What is minimum FD amount in India?
Most banks allow FD starting from ₹1,000 or ₹5,000. Some small finance banks allow even ₹500. There is no maximum limit for normal deposits.
Can I take loan against FD?
Yes, banks usually give 90% to 95% loan against FD value. Interest rate remains slightly higher than FD rate but cheaper than personal loan option.
Do senior citizens get higher FD interest?
Yes, most banks offer additional 0.50% to 0.75% higher interest for people above 60 years age. This benefit applies automatically when FD opened under senior citizen account.
Is RD good for students?
RD is very useful for students because small monthly saving builds future fund. Even ₹500 monthly becomes meaningful amount after few years without market risk.
How bank calculates FD maturity?
Banks calculate interest daily but credit quarterly. Interest gets added to principal every quarter and next quarter earns interest on increased amount. This process is called compounding.
What happens if I miss RD installment?
Bank charges small penalty and interest calculation adjusts. Continuous missing for months may close the RD account automatically and maturity reduces significantly.
Is 5 year FD better than savings account?
Yes, savings accounts usually give 2.5% to 3.5% interest while FD gives around 6.5% to 7.5%. Keeping idle money in savings reduces earning significantly over years.
Can I open FD online?
Yes, almost all banks allow online FD opening through mobile banking or net banking. You only select amount, tenure, and interest payout option and confirm instantly.
Is RD better for monthly salary people?
Yes, RD suits salary earners because fixed monthly saving automatically builds corpus. Many people fail to accumulate lump sum but successfully grow money through RD discipline.
Why FD maturity differs slightly from calculator?
Banks calculate daily interest and round quarterly. Calculators estimate using standard compounding formula. Because of day count and rounding, few rupees difference normally appears.