Fixed Deposit (FD) Calculator
Calculate total maturity value, accrued interest, and tax considerations across monthly, quarterly, semi-annual, or annual compounding frequencies.
FD Investment Parameters
Maturity & Returns Summary
Year-by-Year Growth Schedule
Cumulative Balances| Year | Opening Balance | Interest Earned | Closing Balance |
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Understanding Fixed Deposit (FD) Compounding in India
A Fixed Deposit (FD) is one of India's safest and most trusted investment vehicles, offered by Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs), and the Post Office. Depositors park a lump-sum amount for a predetermined tenure at a guaranteed interest rate.
Unlike standard savings accounts, bank FDs calculate interest using Quarterly Compounding. This means that after every 3 months, the accrued interest is added back into your principal base, generating returns on returns and significantly increasing your overall maturity payout.
Compound Interest Formula
The maturity value of a reinvestment compound FD is calculated using:
- A: Total Maturity Amount
- P: Principal Amount Invested
- r: Annual interest rate (in decimal format, e.g. 7% = 0.07)
- n: Compounding frequency (4 for Quarterly, 12 for Monthly)
- t: Total tenure in years
Tax on FD Interest (Section 194A)
FD interest is fully taxable under "Income from Other Sources" as per your applicable income tax slab:
- TDS Threshold: Banks deduct 10% TDS under Section 194A if total annual FD interest exceeds ₹40,000 (for regular individuals) or ₹50,000 (for Senior Citizens aged 60+).
- Tax Exemption: Senior Citizens can claim a deduction up to ₹50,000 on deposit interest under Section 80TTB in the Old Tax Regime.
- Form 15G / 15H: Taxpayers with total income below the basic exemption limit can submit Form 15G (below 60 yrs) or Form 15H (senior citizens) to prevent TDS deduction.
Standard Indian Bank FD Interest Rate Benchmarks
Representative 2 to 5-Year Tenures| Bank / Institution | General Citizen (p.a.) | Senior Citizen (p.a.) | DICGC Insurance Cover |
|---|---|---|---|
| State Bank of India (SBI) | 6.50% – 7.10% | 7.00% – 7.60% | Up to ₹5 Lakhs (DICGC) |
| HDFC Bank / ICICI Bank | 6.60% – 7.25% | 7.10% – 7.75% | Up to ₹5 Lakhs (DICGC) |
| Post Office Time Deposit (5 Yr) | 7.50% | 7.50% | Sovereign Govt Guarantee |
| Leading Small Finance Banks | 7.75% – 8.50% | 8.25% – 9.00% | Up to ₹5 Lakhs (DICGC) |
Frequently Asked Questions (FAQs)
How is Quarterly compounding different from Annual?
Quarterly compounding credits interest 4 times a year, allowing you to earn interest on interest sooner. For example, a 7.00% interest rate with quarterly compounding yields an effective annual return of 7.19% p.a.
Can I break or withdraw my FD before maturity?
Yes, most banks permit premature FD withdrawal, subject to a penalty of 0.50% to 1.00% on the effective interest rate for the period the deposit remained with the bank. Tax-saving 5-year FDs (under Sec 80C) have a mandatory 5-year lock-in.
Are FD deposits safe in Indian banks?
All registered commercial and small finance banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), an RBI subsidiary, covering principal and interest up to ₹5,00,000 per depositor per bank.