FD / DPS Calculator Bangladesh

A Fixed Deposit (FD) is a savings scheme where you deposit a lump sum with a bank for a fixed period at a predetermined interest rate. In Bangladesh, FD tenures typically range from 1 month to 5 years. Rates vary by bank and tenure — generally higher for longer periods. State-owned banks like Sonali and Janata offer rates around 7–7.5%, while private banks like BRAC and Prime Bank offer 8–8.5% p.a. FDs are considered low-risk because they are covered by Bangladesh Bank's deposit insurance scheme up to ৳1 lakh per depositor.

DPS (Deposit Pension Scheme) is a monthly recurring deposit where you commit to depositing a fixed amount every month for a pre-agreed tenure (typically 3–10 years). At maturity, you receive the total deposited amount plus accumulated interest. It works like a forced savings habit — many banks auto-debit your account monthly. DPS is extremely popular among salaried workers in Bangladesh for building a corpus for marriage, education, or retirement. Missing instalments may attract a penalty or reduce your interest entitlement depending on the bank's terms.

FD interest in Bangladesh uses the compound interest formula: A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is the tenure in years. Most Bangladeshi banks compound quarterly (n=4) or half-yearly (n=2). For example, ৳5,00,000 at 8.5% for 3 years compounded quarterly gives: 500000 × (1 + 0.085/4)^(4×3) = ৳6,37,671. The difference between quarterly and yearly compounding on the same principal over 5 years can be several thousand taka.

Banks in Bangladesh deduct Tax Deducted at Source (TDS) from interest income before crediting it to your account. The current rates are 10% for TIN (Tax Identification Number) holders and 15% for non-TIN holders. This TDS is deducted on each interest payment — quarterly, half-yearly, or at maturity. For example, if your FD earns ৳1,00,000 in interest, you receive ৳90,000 (if TIN holder) or ৳85,000 (non-TIN). Always get a TIN before opening an FD to save tax. Note that TDS is an advance against your income tax liability — you may claim credit for it when filing your annual tax return.

The more frequently interest compounds, the higher your effective annual yield — Daily > Monthly > Quarterly > Half-Yearly > Yearly. At a nominal 8% p.a.: yearly compounding gives exactly 8.00% effective; quarterly gives 8.24%; monthly gives 8.30%; daily gives 8.33%. The difference seems small annually but is significant over 5–10 years. Most Bangladeshi banks use quarterly or half-yearly compounding. Check your bank's FD scheme document to confirm — the compounding frequency is not always prominently advertised.

Premature withdrawal (breaking an FD before it matures) is allowed by most Bangladeshi banks but comes with penalties. Common penalties include: (1) Interest is paid at the rate applicable for the actual period held, which is usually lower than the contracted rate. (2) A further 1–2% penalty deduction is applied on the interest earned. (3) Some banks forfeit all interest if the FD is broken within the first 3 months. Always read the premature encashment clause in your FD receipt. If you need liquidity, consider asking for an overdraft or loan against your FD instead — most banks lend up to 90% of FD value at a slightly higher rate, allowing you to keep the FD intact.

Both serve different financial goals. FD is better if you have a lump sum to invest and want a guaranteed return for a fixed period with minimal effort. DPS is better if you want to build savings gradually from monthly income and need a structured savings discipline. FD generally offers slightly higher rates since the bank gets the full principal upfront. DPS effective yield is slightly lower because early instalments earn interest for the full tenure while later ones earn for shorter periods. For most salaried workers: open a DPS for disciplined savings and place any windfalls (bonus, increments) in FDs. Both are safe, low-risk instruments suitable for conservative investors.

Deposits in scheduled banks of Bangladesh are partially protected by the Bank Deposit Insurance Act 2000, managed by Bangladesh Bank. Each depositor is insured up to ৳1,00,000 (one lakh taka) per bank in case of bank failure. For amounts above ৳1 lakh, safety depends on the financial health of the bank. State-owned banks (Sonali, Janata, Agrani, Rupali) carry implicit government backing. Among private banks, well-regulated banks with strong capital adequacy ratios are safer. Avoid banks with high non-performing loan (NPL) ratios. Always check Bangladesh Bank's published bank health reports before depositing large sums.