Cumulative vs Non-Cumulative FD Comparison

Cumulative vs Non-Cumulative FD represents a fundamental choice in your FD strategy: do you want maximum growth (cumulative) or regular income (non-cumulative)? In a Cumulative FD, interest is automatically reinvested—you earn interest on interest, accelerating compounding. In a Non-Cumulative FD (monthly/quarterly interest payout), interest is paid directly to your bank account as regular income, while principal stays locked. The difference is substantial: ₹5L cumulative FD at 6.5% for 5 years grows to ₹6.69L (₹1.69L gain). Same amount as non-cumulative generates ₹1.63L total interest paid out over 5 years, but maturity is only ₹5L (no reinvestment). The extra ₹60K from cumulative comes purely from interest compounding. Which to choose depends on your life stage and cash needs. Young professionals building wealth: cumulative (maximize growth). Retirees needing monthly living expenses: non-cumulative (regular cash flow). Many investors use a blended approach: cumulative FDs for surplus capital (long-term wealth building), non-cumulative for a portion to generate monthly income. This calculator compares both scenarios with exact maturity amounts, helping you decide based on your financial goals.