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FD Calculator

Calculate Fixed Deposit maturity amount and interest

๐Ÿ‡ฎ๐Ÿ‡ณ Indian Rupee (โ‚น)
Principal Amount
โ‚น
Interest Rate 7%
% p.a.
Time Period 3 Yrs
Years
Compounding Frequency
Maturity Amount
-
-
Principal
-
Interest Earned

What is a Fixed Deposit (FD)?

A Fixed Deposit is basically you lending money to a bank for a fixed period โ€” could be 7 days, 1 year, 5 years, whatever โ€” and the bank paying you a fixed interest rate in return. Its one of the oldest and most trusted investment options in India. Unlike mutual funds or stocks, FD returns are guaranteed. You know exactly how much youll get at maturity when you open the FD.

Thats why FDs remain popular despite relatively modest returns. For someone who cannot afford to lose money โ€” retired people, emergency funds, short term savings โ€” FD makes a lot of sense. The trade-off is that returns are taxable and usually dont beat inflation over long periods.

How is FD Interest Calculated?

There are two types of FD interest calculation:

Simple Interest FD (rare, usually short term):

Maturity = P + (P ร— r ร— t) Where P = Principal, r = Annual rate, t = Time in years

Compound Interest FD (most common):

A = P ร— (1 + r/n)^(nร—t) Where: A = Maturity amount P = Principal amount r = Annual interest rate (in decimal) n = Compounding frequency per year t = Tenure in years

Most banks compound quarterly (n=4). Some compound monthly. Higher compounding frequency means slightly higher effective returns.

Example: โ‚น1 lakh FD at 7% for 2 years, compounded quarterly:
A = 1,00,000 ร— (1 + 0.07/4)^(4ร—2) = 1,00,000 ร— (1.0175)^8 = โ‚น1,14,868

FD Interest Rates in India โ€” What to Expect

FD rates vary by bank and tenure. As of recent times, regular FD rates are roughly:

Small finance banks like Jana, Suryoday, Ujjivan typically offer 8โ€“9.5% for certain tenures. Regular public sector banks (SBI, PNB) offer around 6.5โ€“7.25%. Private banks (HDFC, ICICI, Axis) are in the 7โ€“7.5% range for popular tenures. Senior citizens get 0.25โ€“0.5% extra on most FDs โ€” this is mandated by RBI guidelines.

Tax on FD Interest โ€” Important to Know

FD interest is fully taxable as per your income tax slab. This is a significant disadvantage compared to some other instruments. If you are in the 30% tax bracket and your FD earns 7%, your post-tax return is only about 4.9%. Compare this to inflation of 5โ€“6% and you are barely breaking even or even losing real value.

Banks deduct TDS at 10% if your FD interest exceeds โ‚น40,000 in a financial year (โ‚น50,000 for senior citizens). If your total income is below the taxable limit, you can submit Form 15G (or 15H for seniors) to avoid TDS deduction.

When Does FD Make Sense?

FD is ideal for: emergency fund parking (3โ€“6 months of expenses), short term goals under 3 years, senior citizens who need stable income, capital protection where you absolutely cannot afford any loss.

FD is not ideal for: long term wealth creation (equity beats it significantly), tax efficient investing (interest is fully taxable), beating inflation over 10โ€“20 years.

FAQs

Can I break an FD before maturity?
Yes, you can break an FD prematurely. However banks charge a penalty โ€” typically 0.5% to 1% reduction in the applicable interest rate. Some banks also have a minimum lock-in of 7 days before premature withdrawal is allowed. Tax saving FDs (5 year) cannot be broken before 5 years.
Is FD interest taxable even if I dont withdraw?
Yes. FD interest is taxable on accrual basis โ€” meaning even if your FD is in cumulative mode and you havent received the interest, you still need to declare it in your tax return each year. Banks report interest accrued to the tax department.
What happens to FD if the bank fails?
DICGC (Deposit Insurance and Credit Guarantee Corporation) insures deposits up to โ‚น5 lakh per depositor per bank. This includes savings, FD, and RD combined. So if you have more than โ‚น5 lakh in one bank, spread it across multiple banks to get full insurance coverage.
What is the difference between cumulative and non-cumulative FD?
Cumulative FD reinvests the interest โ€” you get everything at maturity with compound interest. Non-cumulative FD pays out interest periodically (monthly, quarterly, or annually). Non-cumulative is useful if you need regular income from your FD, like retired persons who depend on it for monthly expenses.