Recurring Deposit.
Small amounts, big corpus.

A recurring deposit (RD) is a fixed-income savings scheme where you invest a fixed amount every month at a pre-agreed interest rate. The bank compounds interest quarterly, and you receive a lump sum (principal + interest) at maturity. Your current setup — ₹5,000/mo at 7.0% for 5 years — grows to ₹3,62,592. Track your overall savings in the Wealth Wallet.

Banks use the compound interest formula for monthly deposits: M = P × [(1+r)ⁿ − 1] / r × (1+r), where r = monthly rate and n = months. Interest contributes 17.2% of the final corpus. Your interest earned is ₹62,592. Compare with the FD Calculator for lump-sum alternatives.

Typical RD rates range from 5–8% depending on the bank and tenure. Your current rate of 7.0% is competitive. Small finance banks often offer 0.5–1% more. Senior citizens get an additional 0.25–0.5%. Check the Tax Regime Simulator to see how interest income affects your overall tax.

Longer tenure amplifies compounding significantly. Your 5-year RD earns ₹62,592 in interest. Doubling the tenure more than doubles the interest earned. Use the Savings Sprint Simulator to plan longer-horizon goals.

RD offers guaranteed fixed returns (debt instrument), making it safe and predictable. SIP in equity mutual funds has higher return potential (11–14% historically) but with market risk. RD is for short-to-medium goals; SIP is for long-term wealth creation. Use the SIP vs Lumpsum Simulator to compare potential equity returns.

Yes, but banks charge a premature withdrawal penalty of 0.5–1% on the applicable rate, reducing your effective return. A better strategy is to maintain an emergency fund so you never need to break an RD. Use the Emergency Fund Calculator to ensure you have a liquid cushion.

Yes — RD interest is added to your income and taxed at your slab rate. TDS is deducted at 10% if annual interest across all deposits exceeds ₹40,000 (₹50,000 for seniors). Your interest of ₹62,592 over 5 years is taxable annually. Consider the Investment Wallet for tax-efficient alternatives like ELSS.

Absolutely — RD is ideal for goal-based saving. After 5 years, your total invested is ₹3,00,000 with a maturity of ₹3,62,592. Pair this with the Family Life Stage planner for larger property goals.

Always build your emergency fund (3–6 months of expenses) before locking money into an RD. RD is not accessible without penalty — your emergency fund must be immediately liquid. Check your coverage with the Emergency Fund Calculator.