About the FD Calculator
A fixed deposit locks a sum away for an agreed term at an agreed rate, and the bank compounds the interest at a set frequency until maturity. The growth is A = P x (1 + r/n)^(n x t), where P is the deposit, r is the yearly rate, n is how many times a year interest is added and t is the term in years. Indian banks usually compound quarterly, which is the default here, while many other markets compound half yearly or yearly.
Terms can be entered in years, months or days, so a 555 day special can be priced without converting anything by hand. The result separates the maturity amount from the interest earned and adds the effective annual yield, which is the honest comparison number when two banks quote different compounding. A quarterly compounded 7 percent deposit yields 7.19 percent a year, so it beats a yearly compounded 7.1 percent offer.
A few real world details sit outside the formula. Interest on a deposit is taxable in most jurisdictions and banks often deduct tax at source, so the amount reaching your account can be lower than the maturity figure shown. Breaking a deposit early usually attracts a penalty of half a percent to one percent on the applicable rate. Cumulative deposits reinvest interest as modelled here, while non cumulative ones pay it out and therefore do not compound. For a recurring yearly contribution instead of a single deposit, try the PPF Calculator or the Future Value Calculator.
How to use
- Enter the deposit amount you plan to lock in.
- Type the rate the bank quotes for that exact tenure bucket.
- Set the term and pick years, months or days to match the offer.
- Choose the compounding frequency, quarterly for most Indian banks, and read the maturity value.
Common questions
- What is the effective annual yield line?
- It restates the quoted rate as the growth you actually get after a year of compounding, so two deposits with different compounding can be ranked fairly.
- Does this show the amount after tax?
- No, it shows the gross maturity value. Deduct your own tax rate on the interest to see what lands in the account.
- Can I model a monthly payout deposit?
- Not directly. A payout deposit does not compound, so set compounding to yearly and treat the interest line as the yearly amount paid out.
- How do senior citizen rates work?
- Banks usually add a quarter to half a percent to the standard rate. Enter the enhanced rate and the rest of the maths is identical.