An RD is not one deposit — it is a series of them. The first instalment earns interest for the whole tenure, the second for one month less, and the last for barely a month. The calculator compounds the running balance month by month.

Because banks credit RD interest quarterly, the quarterly rate is converted into its equivalent monthly rate first, so the maturity figure matches what the bank actually pays.

Given: ₹5,000/month for 5 years at 7% p.a., compounded quarterly

Quarterly rate = 0.07/4 = 0.0175 → equivalent monthly rate i = (1.0175)^1/3 − 1 = 0.005799

60 instalments compounded month by month → maturity ≈ ₹3,58,600

Total deposited = 5,000 × 60 = ₹3,00,000 → interest earned ≈ ₹58,600

• Instalments are assumed paid at the start of each month, as in a standard RD mandate.
• Quarterly compounding is the norm for bank and post office RDs.
• Missing an instalment usually attracts a small penalty and reduces the maturity value.
• RD interest is fully taxable and TDS may apply; taxes are not deducted here.

Why is RD interest lower than an FD of the same total?
Because the money goes in gradually, so the average amount invested is roughly half that of a lump-sum FD.

Can I withdraw early?
Yes, usually with a rate penalty and after a minimum lock-in period.

Is RD better than SIP?
RD gives a guaranteed return; SIP is market-linked with higher potential but no guarantee.