Work out exactly what a fixed deposit matures to, with quarterly compounding as Indian banks actually apply it, the senior-citizen rate bonus, TDS assessed year by year and the post-tax value that is the only figure worth comparing.
Step 1
Enter the deposit and the rate
Use the rate your bank quotes for this specific tenure — FD rates are not linear, and a 400-day special often beats a 3-year deposit.
Step 2
Pick how interest is handled
Reinvested interest compounds. Interest paid out monthly or quarterly does not, which is why a payout FD earns visibly less.
Step 3
Set your tax slab
FD interest is taxed at your slab rate, so the post-tax figure is what you should compare against other options.
Maturity value
₹7,07,389
What the deposit is worth after 5 yrs.
Interest earned
₹2,07,389
Tax on interest
₹62,217
Interest is added to your income and taxed at 30%.
What compounding adds
₹32,389
The difference between compounding quarterly and receiving simple interest at the same rate.
A cumulative fixed deposit is straightforward compound interest. The only detail that matters is the compounding frequency, which for Indian banks is almost always quarterly rather than annual.
A = P × (1 + r ÷ n) ^ (n × t)Maturity amount
What the bank pays you at the end of the term.
Principal
The amount you deposit.
Annual interest rate
As a decimal, so 7% is 0.07. Any senior-citizen bonus is added before this step.
Compounding periods a year
Four for quarterly, twelve for monthly.
Tenure in years
A 30-month deposit is t = 2.5.
In payout mode nothing compounds, so interest is simply P × r × t. The effective annual yield — (1 + r ÷ n)ⁿ − 1 — is why a 7% deposit compounded quarterly actually earns 7.186% a year.
Answers about the fd calculator.
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Background reading on the ideas behind these numbers.
For most people the question answers itself, because a SIP is simply what investing a salary looks like. The genuine dilemma arrives when a large sum lands at once — and there the arithmetic and the behavioural answer point in different directions.
"Six months of expenses" is a reasonable starting point and a poor answer. The right number depends on how stable your income is, how much of your outgo is fixed, and how many people depend on you — and it is usually larger than people expect.
This tool is provided for educational purposes only. Results are estimates based on the values you enter and do not constitute financial advice.