Uses standard compound-interest banking formulas. Last checked September 2026, see Methodology & Sources.
How FDR interest is calculated
Most Bangladeshi banks compound FDR interest quarterly: A = P × (1 + r/n)ⁿᵗ, where P is your deposit, r is the annual rate, n is the number of compounding periods per year, and t is the tenure in years. Banks then deduct source tax (AIT) from the interest portion before crediting or paying it out, the rate depends on whether your TIN is registered with the bank.
Worked example
Deposit ৳500,000 at 8% annual interest, compounded quarterly, for one year. The maturity value comes to about ৳541,216, meaning gross interest earned is ৳41,216. With a TIN on file, the bank deducts 10% source tax on that interest, about ৳4,122, leaving a net maturity value of roughly ৳537,094. Without a TIN, the higher 15% rate would apply instead, reducing the net amount further.
Quarterly compounding versus a simple annual rate
Compounding quarterly rather than once a year means each quarter's interest starts earning its own interest for the remaining quarters, which is why the actual return on an 8% FDR is slightly higher than a flat 8% of the deposit. The difference is small over one year but becomes more noticeable over longer tenures, which is one reason FDR rates are often quoted alongside their compounding frequency rather than as a single flat number.
Conventional FDR vs. Islamic Mudaraba deposits
Conventional banks pay a fixed, pre-agreed interest rate on an FDR. Islamic banks offer the equivalent product as a Mudaraba Term Deposit, where you don't earn a guaranteed rate. Instead, you share in the bank's actual investment profit for that period under a profit-sharing ratio agreed in advance. Before locking your money into an FDR, compare the returns against high-yield government savings on our Sanchayapatra Profit Calculator or monthly deposits on our DPS Calculator. If you are depositing funds converted from overseas remittances, calculate your 2.5% government cash incentive on our Currency & Remittance Calculator. When writing your deposit cheque or bank receipt, write the figure in words using our Amount to Words (কথায় রূপান্তর) tool, and see annual tax rebate rules on our Salary & Income Tax Calculator.
FAQ
- What's the difference between FDR, DPS, and Sanchayapatra?
- An FDR is a lump sum deposited in a commercial bank. A DPS is built from monthly installments. Government Sanchayapatra offers higher guaranteed government rates with tax rebates.
- Why is my tax rate different from what I entered?
- Banks apply source tax based on your taxpayer status at the time of payment, having a TIN linked to your account usually qualifies you for the lower rate. Check your bank's current AIT policy if the deducted amount looks different.
- What is a Mudaraba term deposit?
- It's the Shariah-compliant version of an FDR, offered by Islamic banks. Instead of a fixed interest rate, you share in the bank's actual profit under an agreed ratio, so the final return can vary from the projected rate.
- Can I withdraw an FDR before maturity?
- Yes, but early ("premature") encashment usually earns a lower interest rate than the full-term rate, and may incur a fee, check your specific bank's terms before depositing.
- Does compounding frequency make a big difference?
- For a one-year FDR the difference between quarterly and annual compounding is fairly small, a few hundred Taka on a typical deposit, but it grows more noticeable on longer tenures.
- Is this FDR calculator free?
- Yes, free to use, with no sign-up required.