Updated 2026-06-13

₹500/Month RD for 3 Years: Real Returns

Depositing ₹500 a month for 3 years puts ₹18,000 in and matures to ₹19,912 before tax; your slab and 6% inflation decide what you keep. The tables below show the post-tax maturity at the 0%, 5%, 20%, and 30% slabs, and the real (inflation-adjusted) value.

Metric	Amount
Monthly Installment	₹500
Total Deposited	₹18,000
Maturity (6.5%, pre-tax)	₹19,912
Total Interest	₹1,912

Your Tax Slab	Tax on Interest	Post-Tax Maturity	Real Value (6% inflation)
No tax (income ≤ ₹12L / Form 15G)	:	₹19,912	₹16,718
5% (typical)	−₹96	₹19,816	₹16,638
20%	−₹382	₹19,530	₹16,398
30%	−₹574	₹19,338	₹16,237

You deposit ₹18,000; interest adds ₹1,912

Over 3 years you deposit ₹18,000 (₹500 × 36 months). At 6.5% the RD matures to ₹19,912, so interest adds ₹1,912. RD interest is taxed at your slab: at a 5% slab, tax of ₹96 leaves you ₹19,816, and if your total income is within the ₹12 lakh rebate limit you keep the full amount. Use the slab table above for your own bracket.

₹19,816 in 3 years buys what ₹16,638 buys today

₹19,816 in 3 years is not ₹19,816 of today's money. After 6% inflation it buys roughly ₹16,638 in today's terms. RD protects your capital nominally, but higher-slab savers barely outpace inflation: the "safe" choice quietly erodes purchasing power.

A dated expense sets the instalment and tenure the RD needs

For a car, course, or wedding, the RD supplies the saving schedule, and the instalment and tenure decide whether the maturity covers the target. Check the projected maturity against the expense before fixing the term.

Within the ₹12 lakh rebate the RD keeps the full ₹19,912

Forced monthly savings: if a fixed auto-debit is the only way you save, RD builds the habit.
Very short horizons: for money needed within 1–2 years, capital safety beats real growth.
Lower tax slabs: within the ₹12L rebate you keep the full maturity; at 5% or 20% you keep far more than the 30% figure.
Long-term goals: for 5+ year goals, an equity SIP has historically preserved real value far better.

Frequently Asked Questions

How much will a ₹500/month RD give in 3 years?

At 6.5% p.a. compounded quarterly, depositing ₹500/month for 3 years means you put in ₹18,000 and the RD matures to ₹19,912: ₹1,912 of interest. RD interest is taxed at your slab, so what you keep depends on your bracket: the full ₹19,912 if your total income stays within the new regime's ₹12 lakh rebate limit, about ₹19,816 at the 5% slab, ₹19,530 at 20%, and ₹19,338 at 30%.

Is RD interest taxable?

Yes. RD interest is fully taxable at your income tax slab, just like FD. TDS applies once annual interest crosses ₹50,000 (₹1,00,000 for senior citizens), but you owe tax at your full slab regardless. Under the new regime, if your total taxable income, including this interest, stays within ₹12 lakh, the Section 87A rebate brings your tax to zero. Form 15G (or Form 15H for senior citizens) stops TDS if your income is below the taxable limit.

What is the real value of a ₹500/month RD after 3 years?

At a 5% slab the post-tax maturity of ₹19,816 has the purchasing power of about ₹16,638 in today's money after 6% inflation. RD is disciplined saving, but at higher slabs it barely keeps pace with inflation: use the slab table to find your own bracket.

Is RD or SIP better for ₹500/month?

RD pays a guaranteed 6.5%, which after a 5% slab and 6% inflation leaves under 1% real a year; at 20% and 30% slabs the return lands below inflation. The same ₹500/month in an equity SIP has historically returned about 12%, building far more over 3+ years, with short-term volatility. RD suits very short horizons or zero-risk needs; SIP suits long-term wealth.

Try it yourself → RD Calculator