Formula
maturity = P × (1 + r ÷ n)^(n × t)simple: maturity = P × (1 + r × t)
- P — deposit
- r — annual rate as a decimal
- n — compounding periods per year
- t — tenure in years
Interest is added to the deposit at each compounding date and earns interest itself.
Worked example
1,00,000 at 7% for 5 years
- Deposit amount
- 100,000
- Interest rate per year
- 7 %
- Tenure
- 5
- Tenure in
- Years
- Interest is compounded
- Quarterly (most Indian banks)
- Currency symbol
- ₹ Rupee (INR)
Maturity amount
₹1,41,477.82
Interest earned: ₹41,477.82
Effective annual yield: 7.186%
Tenure used: 5 years
How it works
A deposit of 1,00,000 at 7% for 5 years with quarterly compounding matures at about 1,41,477.82, an interest of 41,477.82. With yearly compounding it would be 1,40,255.17 and with simple interest 1,35,000 — compounding frequency matters more than most people expect.
Banks differ in how they treat odd tenures and part-periods, and tax deducted at source (TDS) applies above set interest limits, so the receipt from your bank is the final word. For a recurring deposit use the RD Calculator; to compare with a market-linked plan try the SIP Calculator, and for the effect of inflation on the result see the Inflation Calculator.
Assumptions and limits
- Cumulative deposit with interest paid at maturity; days use a 365-day year.
- No TDS or tax is deducted.