How is Recurring Deposit (RD) interest calculated?

Recurring Deposit interest is compounded quarterly per RBI guidelines. Each monthly installment earns interest for the duration it remains with the bank, using the quarterly compounding annuity formula.

Is RD interest taxable?

Yes, interest earned on RD is fully taxable under Income from Other Sources according to your income tax slab slab rate. TDS is applicable if total interest across FDs and RDs exceeds ₹40,000 per year.

What is the tenure range for a Recurring Deposit?

RD tenures typically range from a minimum of 6 months to a maximum of 10 years in multiples of 3 months.

What is the maturity amount for a ₹15,000/month RD for 5 years?

At an interest rate of 6.8% per annum compounded quarterly, depositing ₹15,000 per month for 5 years (total invested: ₹9.00 L) yields ₹1.73 L in interest, reaching a total maturity value of ₹10.73 L.

How is Recurring Deposit interest compounded in India?

In Indian banks and Post Office, RD interest is compounded on a quarterly basis (every 3 months) using the standard formula M = P * (1 + r/400)^(n/3) summed across all monthly installments.

Is TDS applicable on RD interest?

Yes, TDS under Section 194A is deducted at 10% if total interest from RDs and FDs in a financial year exceeds ₹40,000 for regular individuals (₹50,000 for senior citizens).