Fixed Deposit (FD) Calculator
An FD calculator helps you estimate the maturity value of a fixed deposit — the total amount you receive at the end of the deposit tenure. It also shows the total interest earned separately from the original amount invested, making the outcome easy to interpret.
Fixed deposits are designed to be predictable. Once the amount, interest rate, and tenure are fixed, the return follows a defined calculation method set by the bank or financial institution. This tool mirrors that behavior using standard compounding conventions.
How the Calculation Works
For most fixed deposits, interest is compounded at regular intervals — commonly quarterly in India. At each compounding interval, the interest earned so far is added to the principal, and future interest is calculated on this increased amount.
There is one important exception. If the deposit tenure is shorter than a single compounding period, banks typically apply simple interest for the exact number of days instead of compounding. This calculator follows the same rule to avoid overstating returns for short-term deposits.
- Interest is compounded based on the selected frequency
- If tenure is shorter than one compounding period, simple interest is used
- Day-based calculations assume a 365-day year for accuracy
- Taxes and bank-specific charges are excluded
Inputs and Options Explained
The calculator uses inputs that closely reflect how fixed deposits are defined in practice. Each input has a direct impact on the final maturity value.
- FD Amount — The principal amount deposited at the start of the FD. This remains locked in for the entire tenure.
- Annual Interest Rate (%) — The rate offered by the bank on an annual basis. This is assumed to remain constant throughout the deposit period.
- FD Tenure — The length of the deposit. You can specify this in years, months, or days, depending on how the FD is structured.
- Compounding Frequency — How often interest is added back to the deposit. Most Indian banks use quarterly compounding by default.
Examples and Edge Cases
Two fixed deposits with the same amount, rate, and tenure can still produce slightly different maturity values if their compounding frequencies differ. Quarterly compounding generally results in marginally higher returns than yearly compounding over the same period.
For very short tenures — such as a few weeks or a couple of months — compounding does not apply. In such cases, interest is calculated linearly for the exact number of days, which is why short-term FDs often yield lower gains than expected.
Who Should Use This Tool
This calculator is suitable for anyone evaluating fixed deposit returns under standard banking rules.
- Investors comparing FD tenures and rates
- Individuals planning short- or medium-term savings
- Anyone validating bank-provided maturity estimates
Related Concepts
Fixed deposits sit between simple savings instruments and market-linked investments, and understanding a few related concepts helps place FD returns in context.
- Compounding — The process of earning interest on previously earned interest.
- Simple Interest — Interest calculated only on the principal, typically used for very short FD tenures.
- Maturity Value — The total amount received at the end of the FD tenure.
To compare FD returns with other interest models, you can also use a Compound Interest Calculator or a Simple Interest Calculator.