Fixed Deposit (FD) Calculator
Project the maturity value of a fixed deposit at any nominal rate, term, and compounding frequency. Defaults to quarterly compounding, the convention used by most Indian and Asian banks for term deposits.
Maturity value
£138,041.98
- Interest earned
- £38,041.98
- Effective annual yield
- 6.66%
- Average monthly interest
- £634.03
Maturity uses A = P × (1 + r/n)^(n·t) with t in years and n compounding periods per year. Most Indian banks compound quarterly (n=4); UK fixed-term bonds usually quote an AER that bakes in annual compounding. The effective annual yield shown is the true annualised return after the chosen compounding frequency. Assumes the FD is held to maturity — early withdrawal typically forfeits a portion of interest under the bank disclosure.
How to use this calculator
Enter the deposit amount, the nominal annual interest rate the bank quotes (not the AER or APY), the term in months, and the compounding frequency stated in the bank disclosure. The calculator returns the maturity value, total interest earned, the effective annual yield after compounding, and average monthly interest.
How the calculation works
Maturity is calculated with the standard compound interest formula A = P × (1 + r/n)^(n·t), where P is the principal, r is the nominal annual rate as a decimal, n is the number of compounding periods per year (12 monthly, 4 quarterly, 2 half-yearly, 1 annually), and t is the term in years. The effective annual yield shown is (1 + r/n)^n − 1, the true annualised return after compounding — what UK regulators call the AER and US regulators call the APY.
Worked example
A ₹100,000 fixed deposit at 6.5% for 5 years, compounded quarterly (the SBI / HDFC / ICICI default): A = 100,000 × (1 + 0.065/4)^(4×5) = 100,000 × (1.01625)^20 ≈ ₹138,042. Interest earned is about ₹38,042, the effective annual yield is 6.66%, and the average monthly interest is roughly ₹634. The exact maturity value is ₹138,041.98 — the calculator computes to the paise.
Frequently asked questions
What is a fixed deposit?
A fixed deposit (FD), also called a term deposit, time deposit, or in the US a certificate of deposit (CD), is a lump-sum savings product where you lock funds with a bank for a fixed term in exchange for a fixed rate of interest. Terms typically run from 7 days to 10 years. FDs at scheduled banks in India are insured by the DICGC up to ₹5 lakh per depositor per bank; in the UK the FSCS covers £85,000.
How is FD interest calculated?
For terms of six months or more, banks typically use compound interest with the formula A = P × (1 + r/n)^(n·t). In India, the RBI Master Direction on Interest Rate on Deposits permits compounding at quarterly rests, which is why most Indian banks compound quarterly by default. For very short FDs (under six months), some banks use simple interest instead — check your account disclosure if your term is under 180 days.
What is the difference between nominal rate and effective yield?
The nominal rate is the headline annual rate the bank quotes. The effective annual yield, AER (UK) or APY (US), is what you actually earn after compounding. For a 6.5% nominal rate compounded quarterly, the effective yield is (1 + 0.065/4)^4 − 1 ≈ 6.66%. Always compare FDs on effective yield, not nominal rate, especially when comparing across compounding frequencies.
What if I withdraw the FD before maturity?
Most banks charge a premature withdrawal penalty, typically 0.5%–1% off the agreed rate, applied to the period the deposit actually stayed with the bank. Some FDs (notably tax-saving 5-year FDs in India) have a strict lock-in and cannot be withdrawn early at all. This calculator assumes the FD is held to maturity and does not estimate early withdrawal penalties.
Is FD interest taxable?
Yes. In India, FD interest is taxed as ordinary income at your slab rate; banks deduct TDS at 10% if interest exceeds ₹40,000 a year (₹50,000 for senior citizens). In the UK, FD-style interest counts toward your Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate, £0 for additional-rate). Always check the rules for your geography and tax-advantaged wrappers (ISA in the UK, ELSS-equivalents elsewhere).
Cumulative vs non-cumulative — which does this calculator model?
This calculator models a cumulative FD, where interest is compounded and paid out as a lump sum at maturity. A non-cumulative FD pays interest periodically (monthly, quarterly, or annually) and returns only the principal at maturity, so the maturity value equals the deposit. If you need periodic income rather than a lump sum, use the simple-interest version: monthly payout ≈ P × r ÷ 12.