A recurring deposit takes a fixed amount every month for a term you agree. At the end you receive the deposits plus interest. It is the monthly cousin of a fixed deposit. You do not need a lump sum on day one. You do need to keep the monthly amount going.
India Post and banks compound a monthly deposit every quarter. The maturity is the sum of each deposit grown for the months it stays in. The post office scheme is five years, extendable, with a minimum of ₹100 a month in steps of ₹10. For 1 October 2026 to 31 December 2026 the post office rate is 6.7%, from the same Finance Ministry memorandum as PPF. A bank sets its own rate and its own tenure. This site does not invent a bank card. 6.7% is only the post office figure, unless you type another rate.
Interest is taxable in the year it is credited. From 1 June 2015 a recurring deposit at a bank is a time deposit for TDS. Section 393 (this was section 194A) lets the bank deduct 10% when interest it credits crosses ₹50,000, or ₹1 lakh if you are 60 or older. The income-tax department’s list applies that line to a banking company, not to a post office recurring deposit. The interest on the post office account is still taxable. The RD calculator does not subtract TDS or slab tax. It shows the maturity. You apply your slab afterwards.
A worked example
Post office, ₹1,000 a month for 60 months at 6.7%. You pay in ₹60,000. Interest is ₹11,366. Maturity is ₹71,366. That ₹11,366 is the taxable piece, even though the post office may not have deducted tax.
Set that next to a one-year FD of ₹1,00,000 at 6.25%, which earns ₹6,398 and, at a 30% slab plus cess, pays tax of ₹1,996. The products are different shapes: a lump versus a monthly habit. Neither is PPF. PPF at 7.1% does not tax the maturity. The RD calculator and the FD calculator keep the two sums apart. The guide says which job each one does.
Mistakes people make
- Calling the post office RD tax-free because it skipped TDS.
- Using 6.7% for a bank RD without looking at the bank’s card.
- Comparing the maturity of ₹71,366 with a PPF maturity as if both were after tax.
- Stopping the monthly deposit and expecting the original maturity. Missed instalments are not in this calculator.
- Treating TDS at 10% as the slab. It is a collection under section 393.
The section
The post office account is the National Savings Recurring Deposit Scheme, 2019. The rate is the ministry’s quarterly memorandum. Bank TDS is section 393 (this was section 194A). The interest, post office or bank, is taxable unless a deduction such as section 153 actually covers it, and section 202 does not allow section 153.
Questions
Is a post office RD tax-free?
No. ₹1,000 a month for 60 months at 6.7% earns interest of ₹11,366. That interest is taxable. The post office is not on the same TDS line as a bank RD, but the interest is still income.
Does a bank deduct TDS on an RD?
A recurring deposit is a time deposit. A bank may deduct 10% under section 393 when interest it credits crosses ₹50,000, or ₹1 lakh if you are 60 or older. TDS is not the final slab.
Is 6.7% the bank rate?
No. 6.7% is the post office five-year rate for 1 October 2026 to 31 December 2026. A bank prints its own card and its own tenure. The calculator will use the rate you type. It does not invent a private-bank card.
Sources
Figures checked 28 Oct 2026.