Build wealth one month at a time. Our 2026 RD engine uses standardized quarterly compounding to give you a precise roadmap to your savings goals.
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Disciplined Wealth
A Recurring Deposit (RD) is a unique investment tool that allows you to deposit a fixed amount every month for a pre-determined period. In return, the bank provides a guaranteed interest rate, compounded quarterly, making it a safe haven for short to medium-term financial planning.
Strategic Insight
In 2026, RD rates are often identical to FD rates. Since RDs compound quarterly, the effective yield is slightly higher than a simple savings account, making it ideal for holiday funds or emergency buffers.
RD Expert Hub
2026 Fixed Income Analysis
1. What is a Recurring Deposit?
An RD is a term deposit that allows you to save a fixed amount monthly and earn interest at rates usually similar to FDs.
2. How is RD interest calculated?
RD interest is generally compounded quarterly using the IBA-approved formula for term deposits.
3. What is the minimum tenure for an RD?
Most banks in India offer RDs with a minimum tenure of 6 months.
4. What is the maximum tenure for an RD?
The maximum tenure for a recurring deposit is typically 10 years.
5. Are RD returns taxable?
Yes, interest earned on RD is taxable as per your income tax slab. TDS is applicable if interest exceeds ₹40,000 (₹50,000 for seniors).
6. Can I withdraw my RD early?
Yes, premature withdrawal is allowed, but banks usually charge a penalty of 0.5% to 1% on the applicable interest rate.
7. Do senior citizens get higher RD rates?
Yes, most banks offer an additional 0.50% interest rate to senior citizens in 2026.
8. What is the minimum deposit amount?
It varies by bank, but you can start an RD with as little as ₹100 in many public sector banks and post offices.
9. Can I change the monthly RD amount?
No. The monthly installment remains fixed for the entire tenure once the RD is opened.
10. What happens if I miss an RD installment?
Banks usually charge a small penalty for delayed payments. If multiple installments are missed, the RD may be closed prematurely.
11. Is an RD better than a SIP?
RD offers guaranteed returns and safety, whereas SIP (Mutual Funds) offers market-linked returns with higher risk but potential for more growth.
12. Can I take a loan against my RD?
Yes, most banks allow you to take a loan or overdraft of up to 90-95% of the RD balance.
13. Does the Post Office offer RD?
Yes, the 5-Year Post Office Recurring Deposit is a highly popular government-backed scheme.
14. Is RD compounding monthly or quarterly?
Standard banking RDs compound quarterly, while some specific schemes may offer monthly compounding.
15. Can I open an RD online?
Yes, in 2026, almost all banks allow you to open and manage RDs instantly via net banking or mobile apps.
16. What is the nomination facility?
You can nominate a person to receive the maturity proceeds in the event of the account holder's death.
17. Can a minor open an RD?
Yes, an RD can be opened in the name of a minor, operated by a parent or legal guardian.
18. Is RD affected by repo rate changes?
Only new RDs are affected. Once you open an RD, the interest rate is locked for the entire tenure.
19. Is the HQCalc tool verified?
Yes. HQCalc by Shivam Sagar uses the standardized IBA formula for quarterly compounding maturity.
20. Is this tool free for 2026?
Yes. All professional financial tools on HQCalc are free to use.
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