Fixed Deposits: How Your FD Maturity Is Calculated
A fixed deposit (FD), also called a term deposit or certificate of deposit in some countries, lets you lock a sum of money with a bank for a set period at a fixed interest rate. It is one of the most popular low-risk ways to save, especially for money you'll need on a known date. The free FD Calculator on this page gives you the answer in seconds.
How FD interest is calculated
Most FDs compound interest, usually every quarter. The maturity amount is A = P × (1 + r/n)n×t, where P is the deposit, r the yearly rate, n the number of compounding periods per year and t the tenure in years. Choose your bank's compounding frequency in the calculator to match their figure.
Cumulative vs payout FDs
This calculator shows a cumulative FD, where interest is reinvested and paid at maturity. Many banks also offer payout options, where interest is paid to you monthly or quarterly. Payout FDs don't compound, so the total interest is lower, but they provide regular income.
Things to check before opening an FD
- Premature withdrawal rules. Breaking an FD early usually means a lower rate or a penalty.
- Tax on interest. FD interest is generally taxable, and some banks deduct tax at source above a limit.
- Deposit insurance. Many countries insure bank deposits up to a set amount per depositor.
- Special rates. Some banks offer higher rates for senior citizens or particular tenures.
Using this as an NRE or NRO FD calculator
Non-resident Indians can open NRE and NRO fixed deposits. The maturity maths is exactly the same as a normal FD, so you can use this calculator for both: enter the deposit, the rate your bank offers for NRE or NRO deposits and the tenure. The main differences are about tax and repatriation:
- NRE FD: funded from income earned abroad; interest is generally exempt from Indian income tax and the money is fully repatriable.
- NRO FD: holds income earned in India, such as rent; interest is taxable in India and repatriation has limits.
Rules can change and depend on your residential status, so confirm with your bank or a tax adviser.
Laddering for flexibility
Instead of putting everything into one long FD, you can split it into several deposits that mature at different times. This "ladder" gives you access to part of your money regularly and lets you reinvest at new rates as each one matures.
Planning further? You may also find our SIP Calculator, SWP Calculator useful, or explore all calculators.
Further reading: Fixed deposit (Wikipedia)