How is RD interest compounded in Indian banks?

In accordance with RBI regulations, recurring deposits in Indian commercial banks compound interest on a quarterly basis. Each monthly installment earns interest for the remainder of that quarter and subsequent quarters.

Is RD interest taxable in India?

Yes, RD interest is fully taxable at your personal income tax slab rate. TDS applies if total interest income from bank deposits exceeds ₹40,000 (₹50,000 for senior citizens).

Quarterly Compounding Standard

Recurring Deposit (RD) Calculator

Simulate monthly recurring bank deposit savings under Indian banking quarterly compounding standards.

Monthly RD Parameters

Monthly Deposit (₹)₹5,000

Interest Rate (% p.a.)6.8%

Typical bank RD rates range between 6.5% and 7.1% p.a.

Tenure (Years)3 Years

Maturity Value (3 Years)

₹2,00,059

Total Deposited₹1,80,000

Interest Earned+₹20,059

Maturity Value₹2,00,059

Total Deposited

₹1,80,00090%

Interest Earned

₹20,05910%

Monthly Equity Compounding

Recurring Deposit (6.8%) vs Mutual Fund SIP (12%)

See why long-term monthly SIP creates significantly higher wealth over 5+ years.

Calculate SIP Returns

RBI Banking Standard: RD calculations use standard quarterly compounding conventions mandated by the Reserve Bank of India. Interest is credited quarterly and paid upon maturity. Early withdrawal penalty typically ranges from 0.5% to 1.0%.