FD & RD Calculator

Walk into any Indian bank branch and the staff will recommend Fixed Deposits and Recurring Deposits before anything else. Part of this is genuine simplicity — part of it is that banks earn more from keeping deposits. Understanding both instruments fully lets you use them appropriately rather than reflexively.

A Fixed Deposit is a one-time lump sum parked for a fixed tenure at a guaranteed rate. An RD is a monthly contribution earning compound interest, analogous to an FD built gradually. RDs are excellent for people who don't have a lump sum but want to build one safely — like a down payment fund, a vacation corpus, or a large purchase in 2–3 years.

The critical thing to understand: FD and RD interest is fully taxable at your income slab rate every year (not just on maturity). A 7% FD for a 30% bracket earner becomes 4.9% after tax. This is why for longer time horizons and higher tax brackets, debt mutual funds (before the 2023 rule change) offered better post-tax returns through indexation.

Today, the smart use of FD/RD is: emergency fund (in a high-yield savings or liquid FD), short-term goals under 3 years, and senior citizens for quarterly interest income via SCSS or regular FDs. Not as a long-term wealth strategy against inflation.