Quarterly compounding, which is the default for a cumulative FD at every major Indian bank. Non-cumulative FDs that pay interest out monthly will end lower.
Maturity value
₹7,07,389
- Deposit
- ₹5,00,000
- Interest earned
- ₹2,07,389
Year by year
Why quarterly compounding matters
A cumulative fixed deposit in India compounds quarterly: every three months the interest earned is added to the principal and starts earning on its own. That is why the maturity value is higher than principal × rate × years, and why a calculator that compounds annually will quietly under-quote you.
The gap is small over one year and meaningful over ten. On ₹5 lakh at 7% for 10 years, quarterly compounding is worth roughly ₹18,000 more than annual.
Cumulative versus non-cumulative
A cumulative FD keeps the interest in the deposit until maturity, which is the case this calculator models. A non-cumulative FD pays the interest out monthly or quarterly as income — useful if you need the cash flow, but the payout does not compound, so the total interest over the term is lower.
If the bank offered you a monthly-payout FD and you want the equivalent income figure, the SWP calculator is closer to what you are asking.
Tax and TDS
FD interest is taxable as income at your slab rate in the year it accrues, not the year it is paid. Banks deduct TDS once interest across your deposits with them crosses the annual threshold, and that deduction is an advance against the tax you owe rather than the full liability. Neither is modelled here — the maturity figure is pre-tax.
Common questions
Deposits are insured by the DICGC up to ₹5 lakh per depositor per bank, covering principal and interest together. Above that, the exposure is to the bank.
Related calculators
Recurring deposit
A fixed amount every month into a deposit that pays a contractual rate. See what it matures to and how much of that is interest.
PPF
A yearly contribution to a Public Provident Fund account, compounded annually for the full term. See what the account is worth at maturity.
Compound interest
Interest on the interest. Choose how often it compounds and see what the difference is worth over the term.
Lumpsum
One amount, invested once, left to compound. See what it becomes and how much of that is growth rather than your own money.