How is FD maturity value calculated?
A cumulative fixed deposit compounds interest at fixed intervals, usually quarterly for Indian banks: A = P x (1 + r/n)^(n x t), where P is the deposit, r the yearly rate, n the compounding frequency and t the years. Enter these in FixDoks's FD Calculator to see maturity value, interest and effective yield.
FD Calculator at a glance
| Inputs | Deposit amount, interest rate, tenure, compounding frequency |
|---|---|
| Output | Maturity value, interest earned, effective yearly yield |
| Processing | In your browser; your files are not uploaded |
| Price | Free |
| Works on | Chrome, Edge, Safari and Firefox on Windows, Mac, Android and iPhone |
How to use FD Calculator
- Enter the deposit amount and the yearly interest rate offered by your bank.
- Set the tenure in years, months and days.
- Pick the compounding frequency. Quarterly is standard for Indian bank FDs.
- Read the maturity value, interest earned and effective yearly yield.
How is FD interest calculated?
In a cumulative fixed deposit, the bank adds interest to your deposit at regular intervals and the next interest is calculated on the larger amount. Most Indian banks compound every quarter. The maturity value is:
A = P × (1 + r ÷ n)n × t
- P is the amount deposited.
- r is the yearly rate as a decimal (7% = 0.07).
- n is the number of compounding periods a year: 4 for quarterly, 12 for monthly.
- t is the tenure in years.
Worked example
₹1,00,000 for 5 years at 7% compounded quarterly:
- r ÷ n = 0.07 ÷ 4 = 0.0175
- n × t = 4 × 5 = 20
- A = 1,00,000 × (1.0175)20 = about ₹1,41,478
The interest earned is about ₹41,478. With simple interest you would earn only ₹35,000, so quarterly compounding adds almost ₹6,500 here. The effective annual yield shown by the calculator (7.19% in this case) is the simple yearly rate that would give the same result.
Cumulative vs payout FD
If you choose monthly or quarterly interest payout, the interest is paid to your savings account and does not compound inside the FD. Choose Simple interest (payout) to see the total you receive in that case. Payout FDs suit retirees who need regular income, while cumulative FDs grow faster.
Short deposits
Banks usually pay simple interest on deposits shorter than six months, and some calculate interest on the exact number of days. For short tenures, the result here can differ from your bank's by a few rupees. Senior citizens generally get an extra 0.25% to 0.75%, so enter the rate your bank quotes for your category.
Is FD interest taxable?
FD interest is added to your income and taxed at your slab rate. Banks deduct TDS when interest crosses the yearly threshold, and you can submit Form 15G or 15H if your total income is below the taxable limit. The maturity figure above is before tax.
Choosing a tenure
Rates differ by tenure, and the longest deposit does not always pay the most. Banks often offer their best rate on a specific bucket such as 444 days or 2 to 3 years. Compare the maturity values for two or three tenures here before booking. Splitting a large amount into several FDs of different lengths (a ladder) keeps some money maturing every year and lets you reinvest if rates rise.
Is my FD safe?
In India, deposits in each bank are insured by DICGC up to ₹5 lakh per depositor, covering principal and interest together. Spreading large sums across banks keeps each within the limit.
Results are estimates for planning. Your bank, fund house or the tax department may round differently or apply extra charges, so check the final figure with them.