Fixed Deposit Calculator

A fixed deposit commits a lump sum for a set term at a rate agreed at the outset. The maturity figure depends on four things: the principal, the contracted annual rate, the length of the term, and how many times a year interest is credited to the balance. This calculator applies the standard compound interest identity to all four and returns the maturity amount alongside the interest earned.

What compounding frequency changes

Interest credited more often starts earning interest sooner, so at any positive rate a higher frequency produces a larger maturity figure; at a rate of zero every frequency returns the principal unchanged. The effect is real but small beside the other three inputs. Quarterly compounding at 7% over five years produces about 0.87% more than annual compounding on the same deposit, a difference that holds at any principal or currency, and the gap widens as both the rate and the term rise.

The same product under different names

The same structure is sold under several names depending on the market: fixed deposit, certificate of deposit, term deposit, fixed-rate bond, or fixed-term savings account. The arithmetic is identical in each case. What differs is the compounding convention a provider applies, the notice and penalty terms attached to early access, and how the interest is taxed.

How a deposit compares with the alternatives

A fixed deposit trades access for a contracted rate. An instant-access savings account usually pays less and keeps the money available; a government bond of the same term carries price risk if it is sold before maturity, which a deposit held to term does not. The rate being fixed at the outset means inflation over the term is the exposure a fixed rate leaves open, alongside whatever balance sits above a deposit-guarantee limit. A 7% deposit rate against 5% inflation leaves a real return near 1.9%, not 2%, because the two rates divide rather than subtract. Measured against the 7.19% effective annual yield that quarterly compounding produces, the real return is closer to 2.08%.

A worked example

Using the sample figures on this page, 10,000 at 7% for five years compounded quarterly, the tool returns 14,147.78, of which 4,147.78 is interest. The same deposit compounded annually matures at 14,025.52 instead.

What moves the number most

Principal is exactly proportional: the maturity figure scales one-for-one with it. Rate and term each move it by roughly a third of that at a 7% rate over five years, with term ahead of rate at any positive rate. The term lever works out to n·t·ln(1 + i/n) against the rate lever's n·t·i/(n + i), where i is the decimal rate from the formula panel above, and the first exceeds the second wherever i is positive. The margin widens as the rate rises and narrows as interest is credited more often. Compounding frequency is the smallest of the four, and it is exactly the difference between those two expressions, smaller than the rate lever by roughly 2n/i, so around a hundredfold at quarterly compounding on a 7% rate and around tenfold at annual compounding on a high one. It changes the shape of the growth rather than its size.

What the calculation leaves out

Taxes on the interest, provider fees, inflation and any penalty for withdrawing before the term ends all sit outside the model. The rate is held constant for the whole term, and interest is treated as staying in the deposit rather than being paid away as it accrues.

The formula behind this

Maturity = Principal × (1 + rate/frequency)^(frequency × years), with the rate expressed as a decimal.