Fixed Deposits
Cumulative vs non-cumulative FD
A cumulative FD generally reinvests interest until maturity, while a non-cumulative FD pays interest periodically; the better fit depends on cash-flow needs.
Cumulative deposits
Interest is typically added to the balance under the product’s compounding terms. The depositor receives the principal and accumulated interest at maturity, subject to the bank's terms.
Non-cumulative deposits
Interest may be paid monthly, quarterly, half-yearly or yearly. That can support regular cash flow, but the paid-out interest is not automatically reinvested in the deposit.
Compare the right things
Look at payout frequency, effective maturity, liquidity needs, premature-withdrawal conditions and tax treatment—not just the headline annual rate.
A practical limitation
Actual product names and features differ by bank. Confirm the deposit receipt and terms before opening or renewing an FD.
This guide is for general education. Rules, lender terms, bank terms and individual circumstances can change the result.
Use the relevant calculator