At the Post Office rate (6.7%)
You deposit ₹6,00,000. The maturity value is ₹7,13,658, so the interest is ₹1,13,658.
At other rates
| Rate | Maturity | Interest |
|---|---|---|
| 6.00% | ₹7,00,636 | ₹1,00,636 |
| 6.50% | ₹7,09,908 | ₹1,09,908 |
| 6.70% | ₹7,13,658 | ₹1,13,658 |
| 7.00% | ₹7,19,328 | ₹1,19,328 |
| 7.25% | ₹7,24,094 | ₹1,24,094 |
| 7.50% | ₹7,28,897 | ₹1,28,897 |
Each quarter of a percent is worth roughly ₹4,000–5,000 over five years on this amount. Bank RD rates change often and differ by tenure, so compare the rate for exactly 60 months.
TDS at this size
The interest earned in the final year is about ₹42,000, still under the ₹50,000 TDS limit for one bank. But the limit counts all your interest from that bank — FDs and savings — so you may still see TDS. Interest is taxable every year as it accrues, even though you receive it only at maturity; your AIS (Annual Information Statement) will show it.
RD or SIP?
An RD gives a guaranteed figure; a mutual fund SIP can grow more over long periods but can also fall. For money you need on a fixed date within five years, an RD is the calm choice. For goals ten or more years away, many people combine both.
Picking the right RD
Post Office RDs suit people who value a sovereign guarantee and a fixed 5-year plan. Bank RDs offer more flexible tenures and sometimes slightly higher rates, especially at small finance banks, which are covered by DICGC deposit insurance up to ₹5 lakh per depositor per bank (including principal and interest). For ₹6 lakh plus interest, splitting across two banks keeps everything within the insurance limit.
Watch the premature withdrawal rules: banks usually charge a penalty of 0.5%–1% on the rate if you break the RD early, and the Post Office pays only the savings rate if you close before maturity. Choose a monthly amount you can comfortably keep up for all 60 months — it is better to start with ₹8,000 and add a second RD later than to struggle with ₹10,000.
One more practical point: nominate someone when you open the RD. If anything happens to you, the nominee can claim the money quickly without succession paperwork.
Key RD figures (checked 5 November 2026)
| Item | Figure |
|---|---|
| Post Office 5-year RD rate (Oct–Dec 2026) | 6.7%, compounded quarterly |
| Minimum deposit | ₹100 a month (Post Office) |
| TDS threshold per bank | ₹50,000 interest a year (₹1,00,000 seniors) |
| TDS rate | 10% with PAN, 20% without |
| Compounding formula | Σ P × (1 + r/400)^(k/3) |
FAQ
How much will ₹10,000 per month in RD give in 5 years?
₹7,13,658 at 6.7% (₹6,00,000 deposited plus ₹1,13,658 interest).
What is the maturity at 7% for ₹10,000 a month?
₹7,19,328 after 60 months.
Is TDS deducted on this RD?
Usually not, because the yearly interest stays under ₹50,000 — unless your other deposits with the same bank push you over.
Sources (checked 5 November 2026): Ministry of Finance (Department of Economic Affairs) small savings rates for Q3 FY 2026-27, announced 30 September 2026 (5-year RD 6.7%, reported by Studycafe and Free Press Journal); India Post Recurring Deposit Account rules (quarterly compounding, default fee, loan and premature closure); Income-tax Act TDS thresholds for interest (₹50,000 / ₹1,00,000 for senior citizens from 1 April 2025).