Fixed Deposit Maturity Value Calculator
Calculate the maturity amount and total interest earned on a fixed deposit (term deposit / CD). Supports any compounding frequency — monthly, quarterly, semi-annual, or annual.
How to use this tool
- Enter principal amount, annual interest rate, tenure and compounding frequency (per year) in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your maturity value and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
A = P × (1 + r/n)n×t
Where P = principal, r = annual rate (decimal), n = compounding periods per year, t = tenure in years. Interest earned = A − P. Effective Annual Rate = (1 + r/n)n − 1.
How it works
A fixed deposit earns compound interest: at each compounding period, interest is added to the principal and itself begins earning interest. More frequent compounding periods (e.g., monthly vs. annual) produce a higher effective return for the same stated rate.
The effective annual rate (EAR) is the annualised equivalent that accounts for compounding within the year, enabling fair comparison across deposits with different compounding schedules.
Worked example
$10,000 FD at 5% p.a. compounded quarterly for 2 years
- P = $10,000, r = 5% = 0.05, n = 4 (quarterly), t = 2 years
- Maturity Value = 10,000 × (1 + 0.05/4)^(4×2) = 10,000 × (1.0125)^8
- (1.0125)^8 = 1.104486..., so Maturity Value = $11,044.86
- Interest Earned = $11,044.86 − $10,000 = $1,044.86
- EAR = (1.0125)^4 − 1 = 1.050945... − 1 = 5.0945%
Maturity value is $11,044.86, with $1,044.86 of interest earned. The effective annual rate is 5.0945%.
Common mistakes to avoid
- Confusing simple interest with compound interest maturity values — banks that compound within the tenure produce a higher maturity value than the simple interest formula A = P(1 + rt).
- Using the wrong value of n for quarterly compounding (should be 4, not 3) or monthly compounding (12, not 30), producing an incorrect maturity amount.
- Not accounting for tax deducted at source (TDS) on interest income, which reduces the net maturity value in jurisdictions that apply withholding tax on FD interest.
Key terms
- What is a fixed deposit?
- A fixed deposit (FD) is a financial instrument where a lump sum is deposited for a fixed term at a predetermined interest rate. It is called a term deposit or certificate of deposit (CD) in some countries.
- What is compounding frequency?
- Compounding frequency is how often interest is calculated and added to the principal within a year. Common options are annually (1), semi-annually (2), quarterly (4), or monthly (12).
- What is the effective annual rate (EAR)?
- The EAR converts a nominal rate with intra-year compounding into its single annual-compounding equivalent. It allows fair comparison between deposits with different compounding schedules.
- Is FD interest taxable?
- In most jurisdictions, interest earned on fixed deposits is taxable as ordinary income in the year it is earned or paid. Consult a tax adviser for rules in your specific country.
Frequently asked questions
- What is the difference between cumulative and non-cumulative fixed deposits?
- Cumulative FDs reinvest interest, compounding it until maturity. Non-cumulative FDs pay interest at regular intervals (monthly, quarterly) rather than accumulating it, resulting in a lower maturity principal.
- Does the maturity amount change if interest is compounded more frequently?
- Yes. More frequent compounding increases the effective annual rate and the maturity value. Quarterly compounding produces more interest than annual compounding at the same nominal rate.
- How do I compare FDs with different tenure and compounding frequencies?
- Convert each to an effective annual rate (EAR = (1 + r/n)^n - 1) and compare. The FD with the higher EAR delivers more real return per year.