How to use
- Enter the deposit amount and the interest rate your bank quotes for the tenure.
- Senior citizen? Add your bank’s extra rate in the optional field.
- Enter the tenure in years, months and days. Special tenures like 444 days can go in the days box.
- Choose when interest is paid: at maturity (cumulative), or monthly, quarterly or yearly.
How FD interest is calculated (formula)
At maturity: A = P × (1 + r/400)^q × (1 + r × part year ÷ 100)
Quarterly: P × r ÷ 400 each quarter
Monthly: P × r ÷ (1200 + r) each month
Yearly: P × r ÷ 100 each year
- P is the deposit, r the yearly rate in % and q the number of full quarters.
- Cumulative deposits compound every quarter. SBI and HDFC Bank both state this for their reinvestment deposits.
- After the last full quarter, the remaining months and days earn simple interest.
Example
₹1,00,000 at 7% for 5 years:
- At maturity: ₹1,00,000 × 1.0175^20 = ₹1,41,477.82, so ₹41,477.82 of interest.
- Quarterly payout: ₹1,750 every quarter, ₹35,000 in total.
- Monthly payout: ₹579.95 a month, ₹34,797.02 in total.
- Yearly payout: ₹7,000 a year, ₹35,000 in total.
Quarterly compounding makes 7% work like 7.19% a year when you leave the interest in.
Maturity value of ₹1,00,000 (cumulative)
| Rate | 1 year | 3 years | 5 years |
|---|---|---|---|
| 6% | ₹1,06,136.36 | ₹1,19,561.82 | ₹1,34,685.50 |
| 6.5% | ₹1,06,660.16 | ₹1,21,340.76 | ₹1,38,041.98 |
| 7% | ₹1,07,185.90 | ₹1,23,143.93 | ₹1,41,477.82 |
| 7.5% | ₹1,07,713.59 | ₹1,24,971.64 | ₹1,44,994.80 |
| 8% | ₹1,08,243.22 | ₹1,26,824.18 | ₹1,48,594.74 |
An extra 0.5% for a senior citizen turns 7% into 7.5%: ₹1,44,994.80 after 5 years instead of ₹1,41,477.82.
Why the monthly payout is discounted
Monthly interest reaches you before the quarter ends, so banks pay a little less. SBI and HDFC Bank both say monthly interest is paid at a discounted rate.
One bank’s published method pays P × r ÷ (1200 + r) a month. That is slightly less than a third of the quarterly payout.
Short deposits, odd tenures and rounding
A deposit shorter than one quarter earns simple interest only. Banks set their own rules for short deposits, so check yours.
For tenures in days, full quarters compound and the rest earns simple interest, counting 365 days a year. A 444-day deposit at 7.25% is 4 quarters plus 79 days: ₹1,00,000 becomes ₹1,09,135.58.
Banks count from your actual dates, so their figure can differ by a day’s interest.
Banks may round interest to the rupee. All figures here are before tax.
To compare with an investment that compounds monthly or yearly, try the compound interest calculator.