FD Calculator
Calculate the maturity amount and interest earned on a Fixed Deposit (FD). Enter your deposit amount, interest rate, tenure, and compounding frequency to see guaranteed returns. Compare with a recurring deposit calculator for monthly investments or our CD calculator for US certificates of deposit.
How to Calculate FD Maturity Amount
- Note your deposit amount and the interest rate offered by the bank.
- Determine the tenure and compounding frequency (most banks compound quarterly).
- Apply the compound interest formula with the appropriate compounding periods.
- The maturity amount includes your principal plus all compounded interest.
- Compare quarterly vs annual compounding to see the difference in returns.
Formula
Maturity Amount = P x (1 + r/n)^(n x t)
Where:
P = Principal (deposit amount)
r = Annual interest rate (as decimal)
n = Compounding frequency per year (4 for quarterly)
t = Tenure in years
Interest Earned = Maturity Amount - Principal
Effective Rate = (1 + r/n)^n - 1Example
You deposit 1,00,000 in an FD at 7.5% for 2 years with quarterly compounding:
P = 1,00,000
r = 7.5% = 0.075
n = 4 (quarterly)
t = 2 years
Maturity = 1,00,000 x (1 + 0.075/4)^(4 x 2)
= 1,00,000 x (1.01875)^8
= 1,00,000 x 1.16054
= 1,16,054
Interest Earned = 1,16,054 - 1,00,000 = 16,054
With annual compounding:
Maturity = 1,00,000 x (1.075)^2 = 1,15,563
Difference = 16,054 - 15,563 = 491 more with quarterly compoundingFD Compounding Comparison Table
| Deposit | 1 yr Quarterly | 1 yr Annual | 3 yr Quarterly | 5 yr Quarterly |
|---|---|---|---|---|
| 50,000 | 3,857 | 3,750 | 12,486 | 22,497 |
| 100,000 | 7,714 | 7,500 | 24,972 | 44,995 |
| 200,000 | 15,427 | 15,000 | 49,943 | 89,990 |
| 500,000 | 38,568 | 37,500 | 124,858 | 224,974 |
| 1,000,000 | 77,136 | 75,000 | 249,716 | 449,948 |
Interest earned at 7.5% p.a.
Frequently Asked Questions
What is a Fixed Deposit?
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum for a fixed period at a predetermined interest rate. It offers guaranteed returns with no market risk, making it one of the safest investment options.
How does compounding frequency affect FD returns?
More frequent compounding yields higher returns. Quarterly compounding earns slightly more than annual compounding because interest is calculated on previously earned interest more often. The difference grows with larger deposits and longer tenures.
What is the penalty for breaking an FD early?
Premature withdrawal typically attracts a penalty of 0.5-1% reduction from the applicable rate. The interest is recalculated at the lower rate for the actual period held. Some banks offer partial withdrawal without breaking the entire FD.
Is FD interest taxable?
Yes, FD interest is fully taxable as per your income tax slab. TDS at 10% is deducted if annual interest exceeds 40,000 (50,000 for senior citizens). You can submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.
What is a tax-saving FD?
A tax-saving FD has a 5-year lock-in period and qualifies for deduction under Section 80C up to 1.5 lakh per year. However, the interest earned is still taxable. It offers lower risk compared to ELSS mutual funds.