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Quarterly compounding by default

FD calculator

Deposit, rate, tenure and the compounding your bank actually uses — with the effective annual rate so two deposits can be compared.

Short answer: ₹5,00,000 at 7.25% for 5 years with quarterly compounding matures at about ₹7,16,000, of which roughly ₹2,16,000 is interest. Quarterly compounding is worth 7.45% a year on the same headline rate.

Headline rate versus effective rate

Two banks quoting 7.25% can pay different amounts if one compounds monthly and the other yearly. The effective annual rate puts them on the same footing, and it is the number to compare when the tenures match.

Laddering beats guessing

Instead of one five-year deposit, split the amount into five deposits maturing a year apart. You get the same rate, but one matures every year, so a rate rise or an emergency does not force a premature withdrawal penalty.

FD questions

Which compounding frequency should I pick?

Whatever the bank states on the receipt — most Indian banks compound cumulative FDs quarterly, some monthly, and a few use simple interest for short tenures. The effective annual rate line shows what the frequency is worth: 7% quarterly is 7.19% a year.

Is the maturity amount what I receive?

It is the pre-tax figure. Interest on an FD is taxable as income from other sources, and banks deduct TDS once interest crosses their threshold. Use the post-tax number for planning, which needs your slab — the income tax calculator gives that.

What about a premature withdrawal?

Banks apply a penalty of 0.5–1% on the applicable rate, so the maturity shown here is what you get if you hold to the end. Breaking an FD early rarely beats holding it unless you need the money.

How is this different from the compound interest calculator?

It is the same arithmetic with banking defaults: quarterly compounding, a principal you deposit once, and the effective annual rate spelled out. The compound interest page is the general tool with every frequency exposed.

Related tools

PPF calculatorTax-free, yearly compounding, 15-year horizon.Compound interestThe same maths, all frequencies.Income tax calculatorWhat the interest is taxed at.