RD Calculator — Use Recurring Deposits to Build Specific Savings Goals

The case for recurring deposits isn't return — it's behaviour

If you could maintain perfect financial discipline — setting aside the same amount every single month without fail — you probably wouldn't need an RD. You'd invest it somewhere with higher returns. But most people can't. Most people spend what's in their account. The RD's power is that it makes the disciplined choice automatic: the bank takes the money before you can spend it.

The RD calculator converts this behavioural tool into concrete numbers: here's exactly what your monthly commitment becomes at the end of your chosen tenure.

Understanding RD Interest: Why It's Less Than an FD

An FD earns interest on the full principal from day one. An RD earns interest on each instalment from its deposit date.

Your first ৳5,000 deposit earns interest for the full 2 years. Your last ৳5,000 deposit earns interest for only 1 month. On average, each instalment earns interest for about half the total tenure.

This is why an RD at 7.5% earns less total interest than an FD at 7.5% for the same total deposit — the effective rate on the total amount deposited is roughly half the quoted rate over the full tenure.

For a ৳5,000/month RD at 7.5% for 24 months:

• Total deposited: ৳1,20,000
• Interest earned: approximately ৳9,375
• Effective rate on total deposits: ~7.8% annualised (higher than it looks because early deposits earn interest longer)

The RD calculator accounts for this staggered compounding precisely.

How to Use the RD Calculator on sadiqbd.com

1. Enter the monthly instalment — what you'll deposit each month
2. Enter the annual interest rate — your bank's RD rate for the chosen tenure
3. Enter the tenure — in months or years
4. Read the output — total deposited, interest earned, and maturity amount

Planning with the RD Calculator

Matching an RD to a financial goal

Goal: ৳2,00,000 in 3 years for a car down payment. Bank RD rate for 3 years: 7.75%.

Reverse calculation (using RD goal calculator for precision): Required monthly instalment ≈ ৳4,870

Rounding up to ৳5,000/month builds in buffer. Maturity amount at ৳5,000 for 36 months at 7.75% ≈ ৳2,05,000 — covers the goal with ৳5,000 to spare.

Building an emergency fund over 12 months

You have no emergency fund. You want ৳1,20,000 set aside within a year. Your salary allows ৳10,000/month for savings.

An RD at ৳10,000/month for 12 months at 7%:

• Total deposited: ৳1,20,000
• Interest earned: approximately ৳4,550
• Maturity amount: ৳1,24,550

You hit the target and earn a small bonus from interest. At the end of the year, you have more than you put in — and the discipline was enforced automatically.

RD vs. keeping cash in a savings account

Same ৳10,000/month over 12 months:

• Savings account at 4%: earns roughly ৳2,600 in interest
• RD at 7%: earns approximately ৳4,550 in interest

The RD earns ৳1,950 more over the year — and critically, the money is less accessible (withdrawal requires breaking the RD), reducing the temptation to dip in.

RD Tactics for Better Returns

Opening multiple RDs with staggered maturities

Instead of one ৳10,000 RD for 36 months, open three ৳10,000 RDs with different start times (today, in 6 months, in 12 months). They mature at different points — providing liquidity at 36, 42, and 48 months. If rates have risen by the time the later ones are opened, those deposits benefit from higher rates.

Directing salary increments into RDs

Every time you get a salary raise, open a new RD for the increment amount. If you were managing on your previous salary, you won't miss the increment. Over 5–10 years, these small monthly additions compound into meaningful wealth.

Auto-renewing at maturity

Most banks allow auto-renewal — the RD restarts at maturity at the prevailing rate. For savings you don't need immediately, auto-renewal keeps compounding without requiring any action.

Common RD Questions

What if I miss a payment? Banks typically allow 1–2 missed payments before penalising. The penalty is usually a small fee per missed instalment. Set up auto-debit from your salary account on payday to prevent misses entirely.

Can I increase the instalment mid-tenure? No — the instalment is fixed at opening. If your financial situation improves and you want to save more, open a new RD for the additional amount alongside the existing one.

Is RD interest taxable? Yes — interest earned on RDs is included in income and taxable at your applicable rate. The after-tax return may be lower than the quoted rate, especially in higher tax brackets.

Is the RD calculator free? Yes — completely free, no sign-up required.

The RD doesn't promise to make you rich. It promises that money you commit to saving will grow predictably and be there when your tenure ends. For building specific savings targets — an emergency fund, a down payment, a travel fund — that promise is worth a lot.

Try the RD Calculator free at sadiqbd.com — see exactly what your monthly deposits grow to at any rate and tenure.