Post Office RD 2000 per Month 5 Years Calculator
Calculate your Recurring Deposit returns
Enter the amount you plan to deposit every month
Current Post Office RD rate is 6.7% per annum
Select the duration of your RD
Calculation Breakdown
This calculator provides estimates only. Actual returns may vary based on India Post’s current rates and terms.
Introduction: Why a Post Office RD still matters for disciplined savers
For many household savers seeking steady, low-risk returns, a Post Office Recurring Deposit (RD) is a familiar and dependable option. If you plan to set aside a fixed sum every month, the RD helps you build a corpus through small, manageable deposits while earning compound interest. This guide covers everything you need to know about using a post office rd 2000 per month 5 years calculator—how the formula works, what to expect at various interest rates, taxation impacts, and strategies to maximize returns while keeping your risk low.
Whether you are building an emergency fund, planning for a short-term goal, or simply testing disciplined saving, understanding the calculation behind RD maturity will help you plan better and compare options with fixed deposits, mutual funds, or other savings schemes.
What is a Post Office Recurring Deposit (RD)?
A Recurring Deposit at the Post Office is a regular savings plan where an investor deposits a fixed amount every month for a predetermined tenure. The Post Office implements the scheme under its savings portfolio, and interest is compounded quarterly or as applicable by the rules at the time of investment. The hallmark features are disciplined monthly deposits, guaranteed principal, and a predictable maturity amount driven by the current RD interest rate.
Key concepts that matter for calculation include the monthly installment (here, ₹2,000), the tenure (5 years), the interest rate used for compounding, and the compounding frequency. These feed into a formula to compute maturity amount and the interest earned over the life of the RD.
Understanding the components: monthly deposit, tenure, and interest
When you use a post office rd 2000 per month 5 years calculator, there are three primary inputs:
- Monthly Installment: The fixed amount deposited every month — ₹2,000 in our scenario.
- Tenure: The total duration of the RD — 5 years equals 60 months.
- Interest Rate: The annual rate at which the RD accrues interest. Post Office RD rates can change periodically; the maturity formula, however, is the same regardless of the rate used.
Because RD deposits happen monthly, interest is calculated on each installment for the remaining term; earlier deposits earn interest for a longer period than later ones. The total maturity amount is the sum of the principal deposited plus the total interest accumulated on those periodic investments.
The formula behind the RD calculator — manual method
To calculate the maturity amount of a recurring deposit with monthly contributions, the standard mathematical approach is to treat each monthly deposit as a separate investment that grows with compound interest until maturity. A widely used formula to estimate the maturity amount MMM of a recurring deposit with monthly deposits is:
M=P×(1+r/n)nt−11−(1+r/n)−1/nM = P \times \frac{(1 + r/n)^{nt} – 1}{1 – (1 + r/n)^{-1/n}}M=P×1−(1+r/n)−1/n(1+r/n)nt−1
Where:
- PPP = monthly deposit (₹2,000)
- rrr = annual nominal interest rate (in decimal, for example 0.06 for 6%)
- nnn = number of compounding periods per year (for monthly deposits, n=12n = 12n=12 if interest is effectively applied monthly; some institutions compound quarterly—adjust accordingly)
- ttt = total tenure in years (5 years)
A simplified, commonly used practical approximation when monthly compounding is assumed is:
M=P×(1+i)N−11−(1+i)−1M = P \times \frac{(1 + i)^{N} – 1}{1 – (1 + i)^{-1}}M=P×1−(1+i)−1(1+i)N−1
where:
- i=r12i = \frac{r}{12}i=12r (monthly interest rate)
- N=N =N= total number of months (60)
This version is algebraically equivalent to using the future value of an annuity formula adapted to monthly compounding. The key is to be consistent with compounding frequency when applying the rate.
For many savers, the easiest manual method is using the annuity future value formula:
M=P×(1+i)N−1iM = P \times \frac{(1 + i)^N – 1}{i}M=P×i(1+i)N−1
where iii is the monthly rate and NNN is the number of deposits. This assumes deposit at the end of each period (standard RD assumption), and gives a straightforward computation for maturity.
Step-by-step example: Calculate maturity for ₹2,000 per month for 5 years
We will demonstrate with three representative annual interest rates so you can judge outcomes under different scenarios. To keep the explanation clear, the monthly interest rate iii is r/12r/12r/12, and N=60N = 60N=60.
Scenario A — Conservative rate example (5% annual)
- Monthly deposit P=₹2,000P = ₹2,000P=₹2,000
- Annual rate r=5%=0.05r = 5\% = 0.05r=5%=0.05
- Monthly rate i=0.05/12≈0.0041666667i = 0.05/12 \approx 0.0041666667i=0.05/12≈0.0041666667
- Number of months N=60N = 60N=60
Apply the annuity future value formula:
M=2000×(1+0.0041666667)60−10.0041666667M = 2000 \times \frac{(1 + 0.0041666667)^{60} – 1}{0.0041666667}M=2000×0.0041666667(1+0.0041666667)60−1
Carrying out the calculation gives a maturity amount. (If you compute or use a calculator, you’ll find MMM in the neighborhood of ₹137,000–₹139,000 depending on rounding; this is illustrative.)
Scenario B — Moderate rate example (6.5% annual)
- r=6.5%r = 6.5\%r=6.5% → i=0.065/12≈0.0054166667i = 0.065/12 \approx 0.0054166667i=0.065/12≈0.0054166667
M=2000×(1+0.0054166667)60−10.0054166667M = 2000 \times \frac{(1 + 0.0054166667)^{60} – 1}{0.0054166667}M=2000×0.0054166667(1+0.0054166667)60−1
At this rate, maturity increases; the compounding effect on monthly deposits is meaningful over five years, pushing the corpus higher — roughly in the mid-₹140,000s to low-₹150,000s range.
Scenario C — Higher rate example (7.5% annual)
- r=7.5%r = 7.5\%r=7.5% → i=0.075/12≈0.00625i = 0.075/12 \approx 0.00625i=0.075/12≈0.00625
M=2000×(1+0.00625)60−10.00625M = 2000 \times \frac{(1 + 0.00625)^{60} – 1}{0.00625}M=2000×0.00625(1+0.00625)60−1
At a higher rate, the maturity amount increases again — possibly reaching towards or above ₹150,000, illustrating the sensitivity of the final amount to interest rate.
Note: The precise maturity figure depends on exact compounding rules and rounding. For a precise figure, use a financial calculator or spreadsheet where you can plug the monthly rate and N = 60 into the annuity future value function.
Manual calculator you can use — quick model for readers
If you do not have a financial calculator, here’s a quick manual recipe to compute the maturity amount with a basic calculator or spreadsheet:
- Calculate monthly rate i=r/12i = r/12i=r/12.
- Compute (1+i)N(1 + i)^{N}(1+i)N.
- Subtract 1 from that result to get (1+i)N−1(1+i)^N – 1(1+i)N−1.
- Divide the result by iii.
- Multiply by the monthly deposit PPP.
In a spreadsheet (Excel or Google Sheets), you can use the built-in future value function: =FV(i, N, -P, 0, 0) where i is monthly rate and P is 2000. The negative sign ensures the output is positive.
This method is simple and portable and helps you experiment with different rates to see how the maturity changes.
How to interpret the results: maturity amount, principal, and interest earned
When your post office rd 2000 per month 5 years calculator delivers the maturity amount MMM:
- Total principal contributed = ₹2,000 × 60 = ₹120,000.
- Interest earned = M−120,000M – 120{,}000M−120,000.
- The interest portion varies directly with the interest rate used. Over five years, compounding on monthly deposits yields a meaningful benefit compared to simple interest.
For example, if maturity at a particular rate turns out to be ₹150,000, then interest earned is ₹30,000. That interest reflects the cumulative effect of compound interest across multiple monthly installments.
Tax implications: what savers must know
Interest earned on Post Office RD is generally taxable under the investor’s head of income (depending on your jurisdiction’s tax rules). Unlike some schemes that offer tax exemption, RD interest is typically taxable at the investor’s marginal tax rate in the year it accrues or upon maturity, as the tax authority prescribes.
For accurate tax treatment:
- Keep records of annual interest credited.
- Check whether the tax authority requires TDS (tax deducted at source) on post office interest or report it when filing returns.
- Consider the net return after tax — an important comparison when evaluating alternatives such as tax-saving fixed deposits or tax-exempt instruments.
Remember that tax rules change, and you should consult a tax advisor or current official guidance when calculating post-tax yield.
How compounding frequency affects your result
Compounding frequency refers to how often interest gets added to the account such that future interest earns interest too. Common compounding frequencies include monthly and quarterly. Even small differences in compounding frequency can change maturity amounts noticeably over several years.
When using a calculator:
- If the Post Office applies quarterly compounding but you use monthly compounding assumptions, your result will differ slightly from the official maturity computation.
- Always match the compounding frequency in your formula to the stated frequency for the RD you choose.
Most practical RD calculators assume monthly deposits and monthly compounding (or they adapt the formula to convert annual nominal rate to the effective monthly rate). If you prefer absolute precision, use the exact compounding rule listed by the Post Office when you open the account.
Comparing RD with alternatives: FD, SIP, and other savings options
It’s useful to benchmark the post office RD outcome against common alternatives.
- Fixed Deposit (FD): FDs accept a lump sum; for disciplined savers who cannot deploy a lump sum, RDs are better. FDs may offer slightly different rates; compare the total effective yield.
- Systematic Investment Plan (SIP) in mutual funds: SIPs can outperform RDs over the long term but carry market risk. If you need principal protection, RD is preferable.
- Recurring Deposit with other banks or post office: Compare the prevailing RD rate, compounding frequency, and any service constraints to choose the best option.
When comparing, convert all returns to an effective annual yield or compute total corpus for identical periodic contributions over identical tenures to make an apples-to-apples comparison.
Practical tips for optimizing RD returns and discipline
A few practical suggestions to get the most from a Post Office RD:
- Start early: The earlier you begin, the more compounding works in your favor.
- Automate deposits: Treat RD deposits as a non-negotiable monthly expense.
- Ladder RDs: Staggering maturity dates or opening multiple RDs at different times can help manage liquidity needs.
- Verify prevailing rates: Since RD rates can change, confirm the rate when you open a new RD; lock-in happens at account opening.
- Maintain accurate records: Keep receipts and passbook entries safe for proof and tax reporting.
Discipline is the main advantage of RD: regular deposits lead to predictable saving outcomes.
Realistic outcomes: three concrete worked examples (numbers shown rounded)
Below are three practical, rounded examples to give you a feel for typical outcomes for ₹2,000 per month for 5 years.
- Example 1 — Low rate: At 5% annual (monthly rate ≈ 0.4167%), the maturity could be around ₹138,000. Principal contributed is ₹120,000, interest about ₹18,000.
- Example 2 — Medium rate: At 6.5% annual (monthly ≈ 0.5417%), maturity is roughly ₹146,000–₹148,000. Interest about ₹26,000–₹28,000.
- Example 3 — Higher rate: At 7.5% annual (monthly ≈ 0.625%), maturity approaches ₹151,000–₹153,000. Interest in the order of ₹31,000–₹33,000.
These are rounded examples to illustrate how a few percentage points in interest rate can translate into thousands of rupees of additional return over five years.
FAQs On post office rd 2000 per month 5 years calculator
How to use a spreadsheet for exact figures (step-by-step)
Open Excel or Google Sheets and follow these simple steps:
- In cell A1 type Monthly rate and in B1 type your monthly rate as =annual_rate/12.
- In A2 type Number of months and in B2 type 60 (for 5 years).
- In A3 type Monthly deposit (P) and in B3 put 2000.
- In another cell, use the formula =B3 * ((1+B1)^B2 – 1) / B1 to compute maturity.
- The principal is =B3*B2. Interest earned is computed as maturity minus principal.
This transparent method lets you tweak the interest rate to see different scenarios instantly.
Behavioral benefits: why monthly saving builds habits
Beyond numbers, RDs are a behavioral tool. They create a structured saving habit through monthly commitment. Even modest sums like ₹2,000 per month accumulate to meaningful capital in five years, and the psychological boost of consistent saving supports long-term financial discipline.
What to check before opening a Post Office RD
Before applying, verify these details:
- Up-to-date interest rate and compounding frequency
- Minimum and maximum deposit limits
- Premature withdrawal penalty rules
- Documentation and KYC requirements
- Whether the RD earns simple interest or compound interest under the current rules (most are compound)
- Tax withholding rules (if any)
Confirming these points helps avoid surprises and ensures the RD fits your financial goals.
Use cases: who benefits most from this RD plan?
The RD plan of ₹2,000 per month for five years is ideal for:
- Young professionals building a mid-term corpus without the risk of equities.
- Individuals saving for a planned expense in five years (appliance purchase, child’s short-course fee, small wedding budget).
- Conservative savers preferring predictable returns and principal protection.
- People who need a disciplined, automated method to accumulate savings.
For longer horizons or higher returns, compare with instruments that assume market risk, such as mutual funds.
Conclusion: Why you should run the calculator now
A post office rd 2000 per month 5 years calculator is a simple but powerful planning tool. It helps translate the discipline of monthly saving into a predictable corpus and shows how interest rate differences matter. By running a few scenarios at different interest rates, you can make an informed choice that aligns with your liquidity needs and tax considerations.
If you prefer precision, use a spreadsheet or financial calculator with the monthly rate, set N=60N = 60N=60, and apply the annuity future value formula. Once you have a precise maturity target, compare RD returns with alternatives, adjust for taxes, and choose the best route to meet your five-year financial goal.
Final checklist — before you start your RD
- Decide deposit amount and frequency — ₹2,000 monthly in this case.
- Confirm the exact ten-year or five-year tenure — here it’s 5 years (60 months).
- Verify the current RD rate and compounding frequency with the Post Office.
- Use the manual formula or a spreadsheet calculator to compute maturity.
- Consider tax implications and whether post-tax yield meets your needs.
- Start the RD and automate contributions to ensure discipline.