FD Calculator
A fixed deposit pays a fixed rate for a fixed term. The number that matters is not the rate on the counter but what you do with the interest: reinvest it and it earns interest of its own, have it paid out and it does not. This shows both, and exactly what the difference is worth.
Check the working
A worked example
A fixed case, for reference.
Take ₹1,00,000 at 7% a year for 60 months, with interest compounded — or paid out — quarterly.
Rate for one quarter
Quarters in five years
Growth of one rupee
Reinvested: the maturity value
Paid out: the total interest
Reinvested, the deposit earns ₹41,477.82 in interest. Paid out, the same deposit at the same rate earns ₹35,000, arriving as ₹1,750 each quarter. The ₹6,477.82 between them is interest earned on interest, which is exactly what a payout gives up. Neither option is better in general: a payout suits someone who needs the income, and this page only shows what it costs.
The formula
Interest reinvested: each period’s interest joins the deposit and earns interest from then on. When the tenure ends part-way through a period, that last part earns simple interest.
Interest paid out: nothing is added to the deposit, so every period earns on the original amount only.
What each symbol means
- A
- the maturity value when interest is reinvested
- I
- the total interest when it is paid out
- P
- the amount deposited
- r
- the annual interest rate, as a decimal
- f
- how many times a year interest is compounded or paid
- t
- the tenure in years — months divided by 12
What this assumes, and where it stops
Assumptions
- The rate is fixed for the whole tenure, which is what makes it a fixed deposit.
- Reinvested interest is added at the end of each whole period and earns from then on. A part-period at the end of the tenure earns simple interest, so reinvesting never pays less than a payout.
- Paid-out interest is counted in the total, but not reinvested anywhere — it earns nothing further.
- Nothing is withdrawn before maturity.
Limitations
- Tax is not deducted. FD interest is taxable as income, including interest that is reinvested rather than paid out, and banks deduct TDS above a threshold set by the Income Tax rules.
- Banks often count tenure in days rather than months, and some pay simple interest on short deposits or calculate a monthly payout slightly differently, so a bank’s figure can differ from this one by a small amount.
- Breaking a deposit early usually means a penalty and a lower rate. Neither is modelled.
- Deposit insurance through DICGC covers only a limited amount per depositor per bank. Check the current limit before placing a large sum with a single bank.
- Inflation is not deducted unless you turn the overlay on. A deposit earning 7% while prices rise 6% adds much less purchasing power than its rate suggests.
What this calculator does
- Calculates the interest and maturity value of a deposit, with the tenure in months the way banks quote it.
- Compares reinvesting the interest (the cumulative option) with having it paid out monthly, quarterly or yearly.
- Reports the effective annual yield, which is the fair way to compare deposits that compound at different frequencies.
Common questions
Related calculators
Different questions about the same money. These use the same conventions, so the numbers are comparable.
RD Calculator
Calculate the maturity value of a recurring deposit, compounded quarterly the way banks do it, and see why the interest is smaller than it sounds.
Compound Interest Calculator
See how compounding frequency and time change an outcome, and why the last few years contribute the most.
Inflation Calculator
Find what a sum today is worth in future purchasing power, and what a future target costs in today’s money.