How to Calculate FD Maturity Amount and Interest
Short answer
For a cumulative fixed deposit, maturity = P × (1 + r/n)n×t, where P is the deposit, r the yearly rate, n the compounding periods per year (4 for quarterly) and t the years. ₹1,00,000 at 7% for 5 years, compounded quarterly, matures at about ₹1,41,478. Try your own numbers in the FD calculator.
Banks in India usually compound fixed deposit (FD) interest every quarter. That makes the real yearly yield a little higher than the quoted rate. Knowing the formula helps you compare banks, tenures and payout options before you lock your money in.
What is the FD maturity formula?
A = P × (1 + r/n)n×t
- A = maturity amount
- P = principal (deposit)
- r = yearly interest rate as a decimal (7% = 0.07)
- n = compounding periods per year (quarterly = 4)
- t = tenure in years
Interest earned = A − P.
Worked example: ₹1 lakh at 7% for 5 years
r/n = 0.07 ÷ 4 = 0.0175, and n × t = 20. (1.0175)20 ≈ 1.4148, so A ≈ ₹1,41,478 and the interest is about ₹41,478. The effective yearly yield is about 7.19%, slightly above the 7% headline, because each quarter's interest earns interest. These numbers match our FD calculator.
| Deposit | Rate | Tenure | Compounding | Maturity (approx.) |
|---|---|---|---|---|
| ₹1,00,000 | 7% | 1 year | Quarterly | ₹1,07,186 |
| ₹1,00,000 | 7% | 5 years | Quarterly | ₹1,41,478 |
| ₹5,00,000 | 7.25% | 3 years | Quarterly | ₹6,20,273 |
Cumulative vs interest payout FD
In a cumulative FD, interest is added back and paid with the principal at maturity, so you get compounding. In a payout (non-cumulative) FD, interest is paid to your account monthly or quarterly and the principal comes back unchanged. For example, ₹5 lakh at 7% with quarterly payout pays about ₹8,750 each quarter. That suits retirees who need regular income, but the total is lower because nothing compounds. Payout interest works like simple interest; you can check it with the simple interest calculator.
How do short FDs work?
For very short tenures (a few months), many banks pay simple interest for the period instead of compounding. If your tenure is under six months, compare the bank's own calculator with ours and read the deposit terms.
Is FD interest taxable?
Yes. FD interest is added to your income and taxed at your slab rate. Banks deduct TDS once interest in a year crosses the threshold (our calculator flags ₹50,000, or ₹1,00,000 for senior citizens, the limits that applied from April 2025). Thresholds and section numbers can change, so check the latest Income Tax Department guidance. If your total income is below the taxable limit you may be able to submit Form 15G or 15H to avoid TDS.
How safe is my FD?
Deposits in a bank are insured by the DICGC up to ₹5 lakh per depositor per bank, covering principal and interest together. Larger amounts can be split across banks. Company FDs and some other deposit schemes are not covered by this insurance.
How to compare FD offers
- Compare the effective yield, not just the quoted rate. Our calculator shows it.
- Check premature withdrawal penalties (often a cut of 0.5% to 1% in the rate).
- Compare against inflation. A 7% FD with 5% inflation grows your buying power by only about 2% a year before tax.
- For longer goals, compare with other options using the compound interest calculator and our guide on APR vs interest rate.
Want a quick doubling check? The rule of 72 says 72 ÷ 7 ≈ 10.3 years to double at 7%.
Disclaimer: this guide is general information, not financial, tax, legal or medical advice. ViralScopeHub is not responsible for decisions made using it; rules and rates change, so confirm with the official source or a qualified professional.
Last updated: October 16, 2026, 8:51 AM ET. Reviewed against the sources listed below.
Frequently asked questions
How is FD maturity amount calculated?
Use A = P × (1 + r/n)^(n×t). For quarterly compounding n is 4. Interest earned is A minus P.
What is the maturity of ₹1 lakh FD for 5 years at 7%?
About ₹1,41,478 with quarterly compounding, which means roughly ₹41,478 in interest.
Do banks compound FD interest quarterly?
Most Indian banks compound cumulative FDs quarterly, but very short deposits may earn simple interest. Check your bank's terms.
Is FD interest tax free?
No. It is taxed at your slab rate, and TDS may be deducted above the yearly threshold. Tax-saver FDs give a deduction on the deposit, not tax-free interest.
Is my FD insured?
Bank deposits are insured by DICGC up to ₹5 lakh per depositor per bank, including interest.
