How FD maturity is calculated
A cumulative fixed deposit adds its interest back to the deposit every quarter, so later quarters earn interest on earlier interest. Indian banks compound term deposits of six months or more quarterly, which is what this calculator does.
The maturity value is the deposit grown at a quarter of the annual rate, once for every quarter of the term, where P is the deposit, r is the annual rate in per cent and t is the term in years.
A = P × (1 + r/400)^(4t)
The rate is your bank’s, not ours
This calculator does not fill in a rate. FD rates differ from bank to bank, by term, and for senior citizens, and they change when the bank revises its card. Enter the rate on the deposit you are actually looking at, and the result is that deposit’s arithmetic.
The figure is before tax. FD interest is added to your income and taxed at your slab rate, and the bank deducts TDS once its interest to you crosses the yearly threshold, so the money in hand is lower than the maturity value shown.
How is FD interest calculated in India?+
For a cumulative deposit of six months or more, banks compound quarterly: the maturity value is P × (1 + r/400)^(4t), where P is the deposit, r the annual rate in per cent and t the term in years.
What rate does this FD calculator use?+
The one you type. Muktify does not supply or suggest a rate, because each bank sets its own and changes it; use the rate on the deposit offer in front of you.
Is FD interest taxable?+
Yes. FD interest is added to your income and taxed at your slab rate in the year it accrues, and the bank deducts TDS when the interest it pays you in a year passes the threshold set in the Income-tax Act.
What is the difference between a cumulative and a payout FD?+
A cumulative FD reinvests the interest each quarter and pays everything at maturity, which is what this calculator shows. A payout FD pays the interest out monthly or quarterly instead, so it does not compound and ends with only the original deposit.