1. Monthly deposit — the fixed instalment you will pay each month.
2. Annual interest rate — the RD rate your bank or post office quotes for the chosen tenure.
3. Tenure — in years (banks typically allow 6 months to 10 years).

The maturity value, total deposits and interest update instantly; the table shows the balance after each year.

Because each instalment is invested for a different length of time, an RD earns noticeably less than an FD of the same total placed on day one: ₹1,20,000 as a one-year FD at 7% earns about ₹8,600, while ₹10,000 a month for a year earns only about ₹4,600 — the last instalment is invested for just one month. Tenure is the main lever; interest grows faster than deposits in later years as early instalments keep compounding. Missing an instalment usually attracts a small penalty and shifts the maturity date, which the calculator does not model.

A recurring deposit (RD) lets you deposit a fixed amount every month for a chosen tenure and earn interest at a rate fixed when you open it. It combines the discipline of monthly saving with the predictability of a fixed deposit, and is the bank or post-office counterpart of a SIP — with a contracted return instead of a market-linked one.

Deposit ₹5,000 every month for 5 years at an assumed 7%, compounded quarterly. You pay in ₹3 lakh and the RD matures at about ₹3,59,664 — interest of roughly ₹59,700. Stop at 3 years instead and the figures are ₹1.8 lakh deposited, about ₹2,00,686 at maturity, interest of ₹20,700. The last two years produce almost two-thirds of the five-year interest, because by then the early instalments have been compounding for a long time. A single ₹3 lakh FD for 5 years at the same rate would earn about ₹1,24,400 — double the RD — which is the cost of building the sum gradually rather than having it on day one.

A 7% RD does not earn 7% on ₹3 lakh for five years; each instalment earns 7% only for the months it has been deposited, so total interest looks low against the headline rate. Judge an RD by its maturity value, not by rate × total deposits. Tax applies on the interest as with an FD, and TDS can be deducted once the bank's annual threshold is crossed (see how FD and RD interest is taxed). To see the pure effect of compounding on a growing balance, use the Compound Interest calculator with a monthly contribution.

Most Indian banks compound RD interest quarterly. Each monthly instalment earns interest for the months it remains deposited:

M = Σ P × (1 + r/4)4 × nk / 12

where P is the monthly instalment, r the annual rate and nk the number of months the k-th instalment stays invested. The calculator sums this for every instalment.