Fixed Deposit (FD) Calculator: Maturity Amount and Interest

How FD interest is calculated

A fixed deposit earns compound interest: the interest added each period also earns interest in the periods after it. The maturity amount is:

A = P × (1 + r ÷ m)^{m × t}

• P is the amount you deposit.
• r is the yearly interest rate as a decimal (7% is 0.07).
• m is how many times a year interest is added: 4 for quarterly, 12 for monthly, 2 for half-yearly.
• t is the tenure in years.

Most Indian banks compound FD interest quarterly, which is the default above. Some banks pay interest out regularly instead of adding it to the deposit; in that case you do not get compound growth.

Worked example

₹1,00,000 deposited for 5 years at 7% with quarterly compounding grows to about ₹1,41,478, so you earn about ₹41,478 in interest.

Things to know before you invest

• Tax. FD interest is taxable as income. Banks may deduct TDS once your interest crosses the limit set by the tax rules, and forms such as 15G/15H can apply in some cases. Check the current rules with your bank or a tax adviser.
• Deposit insurance. Deposits in a bank are insured by the DICGC up to ₹5 lakh per depositor per bank, covering principal and interest together.
• Premature withdrawal. Breaking an FD early usually means a lower rate and a penalty. Ask the bank before you invest.
• Senior citizen rates. Many banks offer a higher rate to senior citizens. Enter the rate your bank quotes.
• Rates vary. Rates differ between banks and change over time. Check the current rate with the bank.

Common questions

Why is my bank's maturity figure slightly different?

Banks may round differently, count days instead of full months, or use a different compounding rule. Small differences are normal.

Is quarterly or monthly compounding better?

More frequent compounding gives a slightly higher return at the same rate. The difference on most deposits is small, so the interest rate itself matters more.

Is an FD or a recurring deposit better?

An FD suits a lump sum you have now. A recurring deposit suits saving a fixed amount each month. Try our RD calculator to compare.

More tools

• Loan EMI Calculator: Monthly Instalment, Interest and Schedule
• Recurring Deposit (RD) Calculator: Maturity Amount and Interest
• Find IFSC Code

This calculator gives an estimate for information only and is not financial advice. Banks may calculate interest differently (for example rounding, compounding conventions, fees and taxes), so the amount your bank quotes can vary. Please confirm the exact figures with your bank.