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FD Calculator Guide: Estimate Fixed Deposit Maturity
A fixed deposit calculator estimates the maturity value and interest earned from a lump-sum deposit. The result depends on principal, annual interest rate, tenure, and compounding frequency.
How FD interest is calculated
For compound interest, maturity is commonly estimated with A = P(1 + r/n)nt, where P is principal, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is tenure in years. Most Indian banks compound quarterly, so n = 4. The interest earned is A minus P. Banks round interest at each compounding date and may apply product-specific rules, so treat an online figure as a close estimate rather than a guaranteed payout.
Worked example
Deposit ₹1,00,000 for 5 years at 7% per year, compounded quarterly:
- r / n = 0.07 / 4 = 0.0175 per quarter
- n × t = 4 × 5 = 20 quarters
- A = 1,00,000 × (1.0175)20 ≈ ₹1,41,478
- Interest earned ≈ ₹41,478
The same deposit compounded once a year grows to about ₹1,40,255, so quarterly compounding is worth roughly ₹1,200 extra over five years. Longer tenures and higher rates widen that gap.
Cumulative vs non-cumulative FDs
A cumulative FD reinvests interest and pays everything at maturity, which is what the compound formula above models. A non-cumulative FD pays interest out monthly, quarterly, or annually, so the balance never compounds and total interest is lower. Choose non-cumulative if you need the deposit to act as a regular income stream; choose cumulative if you are saving toward a future goal and do not need the cash flow now.
What to compare before opening one
- Advertised rate versus the effective annualised yield after compounding.
- Compounding frequency and the payout option.
- Tenure, and the penalty for premature withdrawal, often 0.5% to 1% off the rate.
- Senior-citizen rate add-ons, usually 0.25% to 0.50%.
- Auto-renewal terms, and whether renewal happens at the prevailing or the originally booked rate.
How tax changes the result
FD interest is fully taxable as income from other sources at your slab rate. Banks deduct TDS at 10% once interest across your deposits with that bank crosses ₹40,000 in a year (₹50,000 for senior citizens), or 20% if no PAN is on file. A calculator shows the pre-tax maturity value, so subtract your marginal tax to see the real return. Submitting Form 15G or 15H when eligible avoids TDS but not the underlying tax liability.
Common mistakes
- Entering a monthly rate where the annual rate is expected, or the reverse.
- Assuming monthly compounding when the bank compounds quarterly.
- Comparing a cumulative FD's maturity value against a non-cumulative FD's periodic payout.
- Treating the pre-tax maturity figure as take-home money.
Frequently asked questions
Is FD interest compounded monthly or quarterly?
Most banks in India compound quarterly. Some NBFCs and small finance banks offer monthly compounding on cumulative deposits, which raises the effective yield slightly. The calculator lets you set the frequency so you can compare.
Does the calculator account for tax?
No. It returns the pre-tax maturity amount and total interest. Apply your income-tax slab rate to the interest portion, and remember the bank may have already deducted TDS during the tenure.
What happens if I withdraw early?
The bank recalculates interest at the rate applicable for the period the money actually stayed, usually minus a penalty of 0.5% to 1%. Your real return is lower than the original maturity estimate, and some tax-saver FDs cannot be broken before five years.
Why does my bank's figure differ by a few rupees?
Rounding. Banks round interest at each compounding date and may use exact day counts rather than whole quarters. Over a long tenure these small differences add up to a handful of rupees.
Related NeatJSON tools: RD Calculator, Compound Interest Calculator, SIP Calculator, CAGR Calculator.
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