Methodology
FD Calculator Methodology
Maturity value of a Fixed Deposit under quarterly compounding (the default for most Indian banks).
By Yadav PatleLast updated:
Formula
M = P × (1 + r/4)^(4×n)
Variables
| Symbol | Name | Description |
|---|---|---|
| M | Maturity value | Principal + interest at the end of the term. |
| P | Principal | Initial deposit amount. |
| r | Annual rate | Decimal (e.g. 7.5% → 0.075). |
| n | Tenure in years | Calculator allows 0.25 to 10 years. |
Worked example
₹5,00,000 for 5 years at 7.5% with quarterly compounding: M = 5,00,000 × (1.01875)^20 ≈ ₹7,24,800.
Assumptions and limitations
Every model leaves something out. Here is what this calculator assumes, and what it does not model, so you can interpret the output honestly:
- Quarterly compounding (the dominant Indian convention). Some banks compound monthly or annually; toggle the compounding frequency if exposed.
- Interest is taxable as per your income slab; banks deduct TDS at 10% above ₹40,000 per year (₹50,000 for senior citizens).
- Premature withdrawal penalty (typically 0.5–1.0%) is not modelled.
Authoritative sources
Where the formula, rates, or framework come from:
Try it now
Plug in your own numbers in the FD Calculator and see the formula applied in real time.
This methodology page is for educational purposes only. Calculations are estimates; real-world results vary with taxes, fees, expense ratios, and market conditions. Yadav Patle is not a SEBI-registered investment adviser. For personalised advice, consult a registered adviser.