FDR vs DPS: How the Returns Are Calculated and Compared
How FDR and DPS interest is worked out, why the two cannot be compared on rate alone, what source tax and excise duty take off, and how both differ from Sanchayapatra.
Published 29 October 2026
The short answer
An FDR earns interest on one lump sum from day one, while a DPS earns on each monthly instalment only from the month it is paid, so the two can’t be compared on rate alone. Banks deduct 10% source tax from the interest of both (15% without proof of a tax return), and excise duty is charged by balance band.
FDR and DPS: the basic difference
Both are bank deposits, but you pay in differently. With an FDR (fixed deposit receipt, ফিক্সড ডিপোজিট) you place one lump sum for a fixed term. With a DPS (deposit pension scheme, a monthly savings scheme) you pay the same instalment every month and get your deposits and interest back together at maturity.
That is why “which earns more?” cannot be answered from the interest rate alone. In an FDR, all of your money earns interest from day one; in a DPS, each instalment earns interest only from the month you pay it. The sums work differently, and which one fits depends on whether you already have the money in hand or will save it from your income each month. To try your own instalment, use the DPS calculator. Below, both calculations step by step.
How FDR interest is calculated
Simple interest = deposit × yearly rate ÷ 100 × months ÷ 12. If the bank adds the interest to your deposit every p months (1, 3 or 12), it compounds: maturity value = deposit × (1 + rate ÷ 100 × p ÷ 12)^(number of credits).
- ৳1,00,000 for 1 year at 9%, simple: interest ৳9,000, 10% tax ৳900, no excise. You receive ৳1,08,100.
- ৳5,00,000 for 3 years at 10%, reinvested quarterly: 5,00,000 × 1.025^12 ≈ ৳6,72,444, so interest is about ৳1,72,444, tax about ৳17,244 and estimated excise ৳1,500. You receive about ৳6,53,700.
Compounding quarterly makes 10% a year worth about 10.38% a year before tax. For your own deposit, use the FDR calculator.
How DPS interest is calculated
Each instalment is paid at the start of the month and earns interest from that month; the scheme matures one month after the last instalment. With monthly compounding:
Maturity value = A × ((1 + i)ⁿ − 1) ÷ i × (1 + i), where A is the monthly instalment, i = yearly rate ÷ 12 ÷ 100 and n = years × 12.
- ৳5,000 a month for 5 years at 9%: you pay in ৳3,00,000 and it grows to about ৳3,79,949, so interest is about ৳79,949 and tax about ৳7,995. The balance never goes above ৳4 lakh, so there is no excise. You receive about ৳3,71,954.
- ৳10,000 a month for 5 years at 10%: you pay in ৳6,00,000 and it grows to about ৳7,80,824, with interest of about ৳1,80,824, tax ৳18,082 and estimated excise ৳1,150. You receive about ৳7,61,591.
In the first example the first ৳5,000 earns interest for all 60 months, but the last ৳5,000 for only 1 month. So at the same rate, DPS interest looks small next to the total paid in; that is how the sum works, not a sign of a worse return. How often interest is credited matters too: the same DPS reaches about ৳3,79,278 with quarterly compounding and about ৳3,76,588 with yearly compounding.
Source tax and excise duty
Under section 102 of the Income Tax Act 2023, banks deduct 10% source tax from both FDR and DPS interest. If you must file a return but do not give the bank proof of return submission (PSR), section 142 makes it 15%. On the ৳1,00,000 FDR above, the tax would then be ৳1,350, leaving ৳1,07,650.
Excise duty is charged on each account once per calendar year, based on the highest balance that year. The FY2026-27 bands, as reported:
| Highest balance in the year | Excise duty |
|---|---|
| Up to ৳4,00,000 | Nil |
| ৳4,00,001 to ৳5,00,000 | ৳150 |
| ৳5,00,001 to ৳10,00,000 | ৳500 |
| ৳10,00,001 to ৳50,00,000 | ৳3,000 |
| ৳50,00,001 to ৳1,00,00,000 | ৳5,000 |
| ৳1,00,00,001 to ৳2,00,00,000 | ৳10,000 |
| ৳2,00,00,001 to ৳5,00,00,000 | ৳20,000 |
| Above ৳5,00,00,000 | ৳50,000 |
The duty is a fixed Taka amount, not a share of the interest. In the ৳10,000-a-month DPS, the balance passes ৳4 lakh in year 3 (৳150) and ৳5 lakh in years 4 and 5 (৳500 each). How many times it is actually charged depends on how many Decembers fall inside the term.
How Sanchayapatra compares
Sanchayapatra is not a bank deposit but a government savings scheme. The government sets its rate, profit is simple, and the rate on the day you buy holds for the whole term. For example, ৳1,00,000 in the 5-year Bangladesh Sanchayapatra at 11.83% pays ৳1,53,235 at maturity after 10% source tax. For your own amount, use the Sanchayapatra Profit Calculator.
| Feature | FDR | DPS | Sanchayapatra |
|---|---|---|---|
| How you put money in | One lump sum | The same instalment every month | One lump sum |
| Who sets the rate | Each bank | Each bank | The government, reviewed every 6 months |
| Interest or profit | Simple, or compound if reinvested | Compound (monthly, quarterly or yearly) | Simple |
| When you receive it | Along the way, or at maturity | All at maturity | Monthly, quarterly or at maturity |
| Source tax | Section 102: 10%, or 15% without proof of return | Section 102: 10%, or 15% without proof of return | Section 105: 10% (lower rates reported in some cases) |
| Encashing early | On the bank’s terms, possibly at a lower rate | On the bank’s terms, possibly at a lower rate | Lower rate for completed years; extra profit taken from the principal |
What to line up before you compare
- The same term and amount. A 1-year FDR and a 5-year DPS are not directly comparable.
- What you receive after tax and excise. Compare net amounts, not gross interest.
- How often interest compounds. At the same rate, monthly compounding earns a little more.
- Early encashment terms. If you need the money before maturity, all three may pay less.
- Your bank’s rate and method. Rates differ between banks, and day counts or rounding change the figures slightly.
- The rate on renewal. A renewed FDR may get a new rate; a Sanchayapatra keeps the rate of its issue date until maturity.
- Missed instalments. A bank may charge a late fee on a DPS; the calculator assumes every instalment is paid on time.
To see the net amount of a monthly saving at your bank’s rate, enter the instalment, rate, term and tax in the DPS calculator. This guide explains the arithmetic only; it does not recommend any product and is not investment advice.
Sources
- The Daily Star: Time to review tax deduction at source provisions on bank and NBFI deposits (7 June 2026)
- Dhaka Tribune: Banks warned on source tax deduction from deposit (10 August 2026)
- The Daily Star: Excise duty exemption threshold on bank deposits rises to Tk 4 lakh (11 June 2026)
- KPMG Bangladesh (Rahman Rahman Huq): Salient features of Finance Bill 2026 (14 June 2026)
- The Financial Express: Parliament approves Finance Bill 2026 with 64 amendments (29 June 2026)
- Prothom Alo: Excise duty will now be applicable if account balance exceeds Tk 300,000 (23 October 2025)
- Sanchayapatra rates: Internal Resources Division order (30 June 2025); source tax: Bangla Tribune (3 February 2026).
Tax and excise checked on 28 October 2026. They can change with each budget, and bank interest rates change often, so ask your bank for its latest rate. What your bank deducts is final.