Why is my recurring deposit maturity lower than the rate suggests?

Because each instalment earns interest only from the month it is paid. The first one earns for the whole term and the last for a single month, so the average money-weighted term is roughly half the nominal one.

Is a recurring deposit better than a lump sum?

For the same total amount, a lump sum at the start always earns more, because every rupee is invested for longer. A recurring deposit is not competing on return; it is competing against not having the lump sum in the first place.

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Recurring Deposit (RD) Calculator

Recurring deposit maturity, compounded quarterly the way banks actually do it. Each instalment earns for only the months it was invested, so the last one earns almost nothing.

Also called: recurring deposit calculator, rd maturity calculator.

Maturity value

₹7,13,658

₹7,13,658 at maturity. You deposit ₹6,00,000 across 60 instalments and earn ₹1,13,658 in interest.

Total deposited

₹6,00,000

Interest earned

₹1,13,658

Instalments

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

An RD is not a lump sum. Each monthly instalment compounds for a different length of time, and banks apply quarterly compounding to each. Summing the instalments individually is exact; the approximation of treating the total as a single deposit overstates the maturity noticeably.

each instalment compounds quarterly for the months it is invested

P: Monthly deposit (currency)
n: Number of instalments (months)

Full derivation: Why two SIP calculators give you different answers

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

10k a month at 6.7% for 5 years

Monthly deposit: ₹10,000
Interest rate (per year): 6.7%
Tenure (years): 5

Maturity value₹7,13,658

sum of instalments; the invested figure is an exact identity

Open this example

zero rate returns the deposits

Monthly deposit: ₹10,000
Interest rate (per year): 0%
Tenure (years): 5

Maturity value₹6,00,000

degenerate case

Open this example

one instalment earns one month

Monthly deposit: ₹10,000
Interest rate (per year): 12%
Tenure (years): 0.08

Maturity value₹10,099

boundary: a single instalment

Open this example

Frequently asked questions

Why is my recurring deposit maturity lower than the rate suggests?: Because each instalment earns interest only from the month it is paid. The first one earns for the whole term and the last for a single month, so the average money-weighted term is roughly half the nominal one.
Is a recurring deposit better than a lump sum?: For the same total amount, a lump sum at the start always earns more, because every rupee is invested for longer. A recurring deposit is not competing on return; it is competing against not having the lump sum in the first place.