📐 Formula Used
RD Maturity = R × [(1 + r)^n – 1] / [1 – (1 + r)^(-1/3)] where r = quarterly rate, n = quarters
Frequently Asked Questions
How does RD work?
An RD lets you deposit a fixed amount monthly for a fixed tenure and earn interest (compounded quarterly per RBI norms), receiving the maturity amount at the end.
What is the RD formula?
RD Maturity = R × [(1+r)^n – 1] / [1 – (1+r)^(-1/3)], where R = monthly deposit, r = quarterly rate, n = number of quarters.
Is RD better than SIP?
RD is a guaranteed return instrument (bank-backed). SIP in equity mutual funds has potential for higher but market-linked returns. Choose based on risk appetite.
Is RD interest taxable?
Yes. RD interest is taxed at your income slab rate. TDS is deducted at 10% if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).