How is FD maturity value calculated?

Fixed deposits use compound interest: M = P × (1 + r/n)^(n·t), where P is the principal, r is the annual rate, n is the number of times interest compounds per year (quarterly for most banks, so n = 4), and t is the tenure in years. The more frequent the compounding, the higher the maturity value for the same headline rate.

Does an FD beat inflation?

Often only barely, and sometimes not at all after tax. If your FD pays 7% while inflation runs 6%, your return after inflation is only about 0.9%, and if FD interest is taxed at your income slab, that can turn negative. This calculator shows the maturity value in today's money, so you see the real growth, not just the headline interest.

Is FD interest taxable?

In India, FD interest is fully taxable at your income-tax slab rate, and banks deduct TDS once annual interest crosses ₹40,000 (₹50,000 for senior citizens). In the US, CD interest is taxed as ordinary income. The maturity value shown here is before tax, so factor in your tax rate to get the net return, which matters most for higher-rate taxpayers.

What compounding frequency do banks use?

Most banks compound fixed deposits quarterly, which is the default here. Some offer monthly or half-yearly compounding, and a few pay simple interest on very short tenures. Switching from annual to quarterly compounding on a 7% 5-year FD adds a meaningful amount to the maturity value, so it's worth confirming with your bank.

Investing

Fixed Deposit (FD) Calculator

Work out the maturity value and interest on a fixed deposit or CD, with your choice of compounding frequency, plus what it's worth today after inflation, the number that decides whether an FD actually grows your wealth.

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Default inflation rate for Other: 3.0% per year, based on long-run global CPI averages data (2026). You can override it in each calculator’s advanced options. See data sources for full citations.

Methodology: Mathematical FormulasData Sources: Inflation & Tax CitationsDisclaimer: Legal Disclosures

How We Work It Out

A fixed deposit grows by compound interest at the bank's compounding frequency:

Maturity = P × (1 + r/n)^n·t

Today's Value = Maturity / (1 + inflation)^t

Where: P = deposit, r = annual rate, n = compounds per year (quarterly = 4), and t = number of years.

Real-World Examples

A 5-year FD at 7%, compounded quarterly

A ₹5,00,000 fixed deposit at 7% compounded quarterly for 5 years matures to about ₹7,07,000, roughly ₹2,07,000 in interest. At 6% inflation, that is worth closer to what ₹5,28,000 buys today, so the deposit barely grows in buying power before tax.

Frequently Asked Questions (FAQ)

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