FD Calculator
Fixed deposits trade flexibility for certainty: you lock money away for a set term and know the maturity value on day one. This calculator shows that value along with the interest earned, so you can weigh a 5-year FD against a shorter one you can roll over, or against a market-linked option.
Inputs
Result
141,477.82
Interest earned 41,477.82
How it works
A = P (1 + r/4)^(4t)
How the fd calculator works
Maturity value = P × (1 + r/n)^(n×t) for a cumulative FD, where interest is retained and compounded — most Indian banks use n = 4 (quarterly).
For a non-cumulative FD that pays out periodically, interest is P × r ÷ n per payout and the principal never grows.
Real return matters more than nominal: subtract tax at your slab rate, then subtract inflation. A 7% FD at 30% tax with 6% inflation has a negative real return.
Worked example: 500,000 for 5 years at 7.1%, quarterly compounding
- Periods: 5 × 4 = 20. Rate per period: 0.071 ÷ 4 = 0.01775.
- Maturity = 500,000 × 1.01775^20 = 711,600 approximately.
- Interest earned = 211,600, an effective annual yield of about 7.29%.
- At a 30% tax slab, post-tax interest is about 148,100, giving roughly 5.1% net.
- With 6% inflation over the same period, purchasing power actually falls slightly.
Common mistakes to avoid
Comparing FD rates without checking compounding frequency
A 7.1% quarterly-compounded FD yields more than a 7.2% annually-compounded one. Convert both to effective yield first.
Forgetting the premature withdrawal penalty
Breaking an FD early typically costs 0.5–1% off the applicable rate, and the rate applied is the one for the period actually held, not the original.
Ignoring tax deducted at source
Banks withhold tax on interest above a threshold, so the amount credited is lower than the maturity value the calculator shows gross.
Frequently asked questions
What is the difference between cumulative and non-cumulative FDs?
Cumulative reinvests interest so it compounds to maturity. Non-cumulative pays interest out monthly or quarterly, which suits income needs but forgoes compounding.
Is FD interest taxable?
Yes, it is taxed as ordinary income in the year it accrues, whether or not it has been paid out to you.
Should I ladder my fixed deposits?
Laddering across several maturities keeps part of your money liquid and reduces the risk of locking everything in just before rates rise.
Does a longer FD tenure always pay a higher rate?
No. Rate curves often peak around 1–3 years, and very long tenures sometimes pay less while exposing you to more rate risk.
How is FD interest calculated for part-years?
Banks apply the rate for the completed tenure slab and compound quarterly, with simple interest applied for the final incomplete quarter.
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