{"id":8324,"date":"2025-08-12T09:43:18","date_gmt":"2025-08-12T09:43:18","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=banking&#038;p=8324"},"modified":"2025-08-12T09:43:18","modified_gmt":"2025-08-12T09:43:18","slug":"what-is-cumulative-fixed-deposit-meaning-and-definition","status":"publish","type":"banking","link":"https:\/\/lemonn.co.in\/blog\/banking\/what-is-cumulative-fixed-deposit-meaning-and-definition\/","title":{"rendered":"What is Cumulative Fixed Deposit?\u00a0\u2013 Meaning and Definition"},"content":{"rendered":"\n<p>A cumulative fixed deposit accumulates interest over the entire tenure and pays out the principal plus compounded interest only at maturity. This contrasts with non\u2011cumulative FDs, which pay interest monthly, quarterly, or annually. Cumulative FDs are suitable for investors seeking higher returns and who do not require periodic income. Because interest is reinvested, the effective yield is higher than the simple interest rate.<\/p>\n\n\n\n<h2 id='differences-between-cumulative-and-non-cumulative-fds'  id=\"boomdevs_1\" class=\"wp-block-heading\">Differences Between Cumulative and Non\u2011Cumulative FDs<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Feature<\/th><th>Cumulative FD<\/th><th>Non\u2011cumulative FD<\/th><\/tr><\/thead><tbody><tr><td>Interest payout<\/td><td>At maturity<\/td><td>Monthly\/quarterly\/half\u2011yearly\/annually<\/td><\/tr><tr><td>Effective yield<\/td><td>Higher due to compounding<\/td><td>Lower since interest is not reinvested<\/td><\/tr><tr><td>Suitability<\/td><td>Long\u2011term wealth creation<\/td><td>Regular income seekers<\/td><\/tr><tr><td>Taxation<\/td><td>Interest taxed at maturity (if interest exceeds threshold)<\/td><td>Interest taxed in year of receipt<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Consider your cash\u2011flow needs when choosing between cumulative and non\u2011cumulative FDs.<\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-8324","banking","type-banking","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/banking\/8324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/banking"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/banking"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=8324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}