What is a Recurring Deposit (RD)?
A Recurring Deposit (RD) allows you to save a fixed amount every month while earning interest rates equivalent to a Fixed Deposit. It is an excellent tool for risk-averse investors who want to build a corpus systematically over time, much like a SIP but with guaranteed returns.
RD Compounding Logic
Unlike an FD where the entire amount earns interest for the full tenure, in an RD, each monthly installment earns interest for a progressively shorter duration. Our RD calculator uses the exact compounding math utilized by leading Indian banks (like SBI, HDFC, ICICI), ensuring penny-perfect accuracy for your maturity amount.
Should You Choose RD or SIP?
An RD is 100% risk-free and guarantees the maturity amount, making it perfect for short-term, non-negotiable goals (like a vacation or insurance premium). An Equity SIP, however, is subject to market risks but historically delivers inflation-beating returns (12-15%) over a 5+ year horizon. Use an RD for capital protection and a SIP for wealth generation.