What this calculates
Enter the amount you deposit, the rate your bank quotes, the tenure and how often the interest compounds, and this shows the maturity amount of a cumulative fixed deposit, how much of it is interest, and the effective yearly yield of the quoted rate. A year-by-year table shows how the deposit grows.
No bank's rate is built in: enter the rate your bank offers for your tenure.
The formula
The interest for each period is added to the deposit, and earns interest itself from then on.
The rate per period
r = annual rate ÷ 100 ÷ periods per yearThe maturity amount
A = P × (1 + r)^(periods)P is the deposit. Most Indian banks compound quarterly — four periods a year.
When the tenure does not end on a period boundary, the full periods compound and the months left over earn simple interest on the grown balance:
The months over
A × (1 + annual rate ÷ 100 × months ÷ 12)The interest
Interest = maturity amount − depositThe effective yearly yield
(1 + r)^(periods per year) − 1Worked example
The same deposit for 10 years matures at about ₹2,00,160 — roughly double.
When to use it, and the mistakes to avoid
Use it to see what a fixed deposit will pay at maturity, to compare tenures and compounding frequencies, and to compare rates from banks that compound differently.
The mistakes that cost the most:
- Using simple interest. 7% simple interest on ₹1,00,000 for five years is ₹35,000, but a cumulative FD compounding quarterly earns about ₹41,478. The interest on the interest is the difference.
- Comparing quoted rates that compound differently. 7% compounded quarterly is about 7.19% a year; 7% compounded monthly is about 7.23%. Compare effective yields, not quoted rates.
- Using this for a payout FD. An FD that pays interest out monthly or quarterly does not compound, so its interest is simple: ₹1,750 a quarter on ₹1,00,000 at 7%.
- Forgetting tax and early withdrawal. The figures are before tax, and breaking a deposit early usually means a lower rate or a penalty.
- Expecting the bank's figure to the rupee. Banks may count days rather than months and round at different points, so their maturity figure can differ by a few rupees.
FAQ
How is FD interest calculated?
For a cumulative fixed deposit, the interest is added to the deposit every compounding period and earns interest itself from then on. Over whole periods that is A = P × (1 + r/n)^(n × t), where r is the annual rate as a decimal, n the compounding periods a year and t the years. Most Indian banks compound quarterly, so n is 4.
How much will ₹1,00,000 earn in an FD at 7% for 5 years?
Compounded quarterly, it matures at about ₹1,41,478, so the interest is about ₹41,478. Compounded monthly it would be about ₹1,41,763, and compounded once a year about ₹1,40,255.
What is the effective yield of an FD?
The yearly rate the deposit really earns once compounding is counted: (1 + r/n)^n − 1. A 7% rate compounded quarterly works out to about 7.19% a year, and compounded monthly about 7.23%. It is the fair way to compare deposits that compound differently.
What if the tenure is not a whole number of quarters?
The deposit compounds for every full quarter, and the months left over earn simple interest on the grown balance. ₹1,00,000 at 7% for 5 years and 2 months is 20 full quarters to about ₹1,41,478, and two more months of simple interest takes it to about ₹1,43,128.
Does this work for an FD that pays interest out every month or quarter?
No. This is for a cumulative FD, where the interest stays in and compounds. A payout FD sends the interest to you instead, so it does not compound: ₹1,00,000 at 7% paid out quarterly is ₹1,750 a quarter, and the deposit itself stays at ₹1,00,000.
Does this include TDS or tax on FD interest?
No. It shows the interest before tax. FD interest is usually taxable and a bank may deduct tax at source, but how much depends on your income and situation, so none is applied here.