Financial Calculators
FD Ladder Calculator
Liquidity every year, the long-tenure rate on most of the money. That is a ladder.
One rung matures every year
₹2,00,000
average rate 6.88%
- All rungs at maturity
- ₹12,38,158
- Total interest
- ₹2,38,158
A ladder splits one deposit into several maturing a year apart. Something matures every year for liquidity, the longer rungs earn the higher rates, and each maturing rung is re-invested at the long end, so you are never locked into one rate for everything. Quarterly compounding; TDS applies on interest.
These figures are for illustrative purposes only and are not investment advice. Please consult your investment adviser for investment related advice.
Never locked in, never all short
Putting one large sum into a single FD forces a choice: a short tenure for liquidity at a lower rate, or a long tenure for a better rate with a penalty if you break it. A ladder splits the sum into equal deposits maturing one, two, three, four and five years out. Something matures every year for liquidity or reinvestment, the longer rungs earn the higher rates, and when a rung matures it goes back in at the long end, so within a few years everything is earning the five-year rate while a fifth still matures annually.
The calculator sizes the rungs, interpolates rates between the shortest and longest tenure, and shows each maturity.
Equal rungs, quarterly compounding
Rung = amount / N, maturing in years 1..N\nRate for year y interpolated between the 1-year and N-year rates\nMaturity = rung x (1 + rate/4)^(4y)Worked example: Rs 10,00,000 split into five rungs of Rs 2,00,000 maturing in years 1 to 5, with rates from 6.5% to 7.25%, matures to Rs 12,38,158 in total, Rs 2,38,158 of interest, at an average rate of 6.88%.
Frequently asked questions
Why not just buy the five-year FD for the higher rate?
Because breaking it early costs a penalty and usually a lower rate. The ladder gives you the five-year rate on most of the money within a few years, with a fifth always maturing when you might need it.
What happens when a rung matures?
Reinvest it for the longest tenure in the ladder. After the first cycle every rung is a five-year deposit, staggered a year apart, which is the steady state.
Does laddering help with rate changes?
Yes, in both directions. If rates rise, each maturing rung catches the higher rate; if they fall, most of the money is already locked at the older, higher rates.
Is interest taxed?
At slab, every year on accrual, with TDS above a threshold. Senior citizens have a separate deduction on interest. The FD vs Equity calculator shows the after-tax picture.
Safe money should still be organised.
We ladder deposits and debt funds for clients who need income and liquidity without giving up rate.