How is the interest on a fixed deposit calculated?
For deposits that pay interest periodically: each payout = amount × annual rate ÷ payouts per year. So 100,000 at 6% paid monthly = 100,000 × 6% ÷ 12 = 500 a month, and you get your full amount back at maturity.
In a cumulative deposit, the interest isn’t paid out; it is added to the balance every year, so it earns interest on interest, and you receive everything at maturity.
Real return after inflation
If prices rise (inflation) faster than your deposit rate, your balance grows in numbers but buys less. The calculator removes the inflation you enter and tells you whether your money is really gaining or losing value.
Frequently Asked Questions
Is monthly or cumulative better?
Cumulative gives a higher total for the same rate, because interest earns interest. Monthly suits you if you need regular income. Compare both in the calculator with the same amount and term.
Can I withdraw before the term ends?
Often yes, after a minimum period, but the bank usually deducts part of the interest or charges a fee. Terms differ, so ask before you invest.
What should I compare my deposit with?
With inflation, to see if your money is really growing, and with the true rate of an installment plan if you’re deciding whether to pay cash. For monthly saving, use our savings calculator.