FD Calculator

A fixed deposit is the most widely held financial product in India after a savings account, and for good reason: the rate is contractually fixed on the day you open it, the deposit is insured up to ₹5 lakh per bank, and the money is available at short notice if you accept a small penalty. What it is not is a growth product — after tax and inflation, a 7% FD usually preserves purchasing power rather than building it.

This calculator is for anyone parking money for a defined period: an emergency fund, a house down payment eighteen months away, a retiree living on interest income, or a parent putting away a lump sum before school fees fall due. Enter your deposit, the rate your bank is quoting and the tenure, and you will see the maturity amount and the interest earned.

How FD interest is calculated

Almost every Indian bank compounds FD interest quarterly on deposits of six months or longer. The maturity value is:

A = P × (1 + r/n)^n×t

• P = deposit amount
• r = annual interest rate as a decimal, so 7% is 0.07
• n = compounding periods per year, which is 4 for quarterly
• t = tenure in years

Quarterly compounding is why the return you actually receive is slightly higher than the advertised rate. A 7% FD compounded quarterly has an effective annual yield of 7.186%, and a 7.25% FD yields 7.450%. Banks call this the "annualised yield" and print it in the fixed deposit receipt alongside the nominal rate.

Three worked examples

1. ₹1,00,000 at 7% for 1 year

With quarterly compounding, n×t = 4 and r/n = 0.0175. The maturity amount is 1,00,000 × 1.0175⁴ = ₹1,07,186, so the interest earned is ₹7,186 rather than the ₹7,000 that simple interest would give. The extra ₹186 is the compounding effect over four quarters.

2. ₹5,00,000 at 7.25% for 5 years

Here n×t = 20 quarters. The maturity value is ₹7,16,130 and the interest is ₹2,16,130. For comparison, simple interest at the same rate for five years would have paid only ₹1,81,250 — compounding adds ₹34,880 over the period.

3. Same deposit as a senior citizen: ₹5,00,000 at 7.75% for 5 years

Banks typically add 0.50 percentage points for depositors aged 60 and above, and some add 0.75 points for "super senior" depositors aged 80 and above. At 7.75% the same ₹5,00,000 matures at ₹7,33,921, giving interest of ₹2,33,921. The extra half a percentage point is worth ₹17,791 over five years.

Rates vary widely between lenders. As of September 2026, large public sector and private banks are broadly in the 6.5% to 7.25% range for one to five year deposits, while small finance banks quote noticeably higher. Do not treat any of these as quotes — check your bank's current card rate before committing.

Cumulative vs non-cumulative FDs

A cumulative FD reinvests the interest each quarter and pays everything at maturity. This is what the calculator above models, and it is the right choice if you do not need the income now.

A non-cumulative FD pays interest out monthly, quarterly, half-yearly or annually. Because the interest leaves the deposit instead of compounding, the total received is lower. On ₹5,00,000 at 7.25% for five years, a quarterly-payout FD pays ₹9,062 every quarter, or ₹1,81,250 in total, against ₹2,16,130 from the cumulative version. Retirees who need a monthly income stream usually accept that trade-off deliberately.

There is also a tax-saver FD: a five-year deposit that qualifies for a Section 80C deduction of up to ₹1.5 lakh. It comes with a hard five-year lock-in, cannot be broken early or pledged as loan collateral, and the deduction is only available under the old tax regime. Since most taxpayers are now in the new regime by default, the tax-saver FD has become far less relevant than it was.

TDS on FD interest

FD interest is fully taxable. It is added to your total income and taxed at your slab rate — there is no special lower rate for it, and no exemption. Banks deduct tax at source under Section 194A when the interest they pay you crosses a threshold. Those thresholds were raised with effect from FY 2025-26 and apply for FY 2026-27 as well.

Two points people get wrong. First, the threshold is per bank, aggregated across all branches, not per FD — three deposits of ₹5 lakh each at the same bank are counted together. Second, TDS is not the final tax. If you are in the 30% slab, the bank has deducted only 10% and you owe the balance when you file your return. Conversely, if your total income is below the taxable limit, you can claim the TDS back as a refund. Interest is taxable on an accrual basis each year even on a cumulative FD that pays out only at maturity, so declare it annually rather than in one lump at the end.

Separately, senior citizens can claim a deduction of up to ₹50,000 a year on interest from deposits under Section 80TTB, but only under the old tax regime.

Form 15G and Form 15H

If your total income for the year will be below the taxable limit, you can ask the bank not to deduct TDS at all by submitting a self-declaration at the start of each financial year.

• Form 15G — for resident individuals below 60 (and HUFs) whose estimated total income is below the basic exemption limit and whose total interest income is below that limit too.
• Form 15H — for resident individuals aged 60 and above whose final tax liability for the year is nil. There is no separate interest ceiling for Form 15H.

Both must be submitted separately to every bank you hold deposits with, and refreshed every financial year in April. Submitting a false declaration is an offence, so if you know you will have taxable income, let the bank deduct and adjust it when you file.

Premature withdrawal penalty

Breaking an FD early does not just stop the interest — it retrospectively rewrites it. The bank pays interest at the card rate applicable to the period the money actually stayed, and then subtracts a penalty, usually 0.5% to 1%.

Say you booked a five-year FD at 7.25% but withdraw after two years, when the bank's two-year card rate is 6.75%. You receive 6.75% minus a 1% penalty, so 5.75% for the two years, not 7.25%. On ₹5,00,000 that is roughly ₹60,900 of interest instead of the ₹78,300 you might have expected at the booked rate. Many banks waive the penalty on deposits broken to reinvest at a higher rate with the same bank, and on deposits held by senior citizens — worth asking before you break one.

DICGC insurance: your ₹5 lakh safety net

Deposits with banks in India are insured by the Deposit Insurance and Credit Guarantee Corporation, a wholly owned RBI subsidiary, up to ₹5,00,000 per depositor per bank. The cover was raised from ₹1 lakh to ₹5 lakh in February 2020 and includes both principal and accrued interest, aggregated across savings accounts, current accounts, fixed deposits and recurring deposits at that bank.

The limit is per bank, not per branch or per account, so ₹8 lakh split across three branches of the same bank is still covered only to ₹5 lakh. Holdings in different capacities — individually, and jointly with a spouse in a different name order — are treated as separate depositors, which is a legitimate way to extend cover. All commercial banks, small finance banks, payments banks and co-operative banks are covered; NBFC deposits and corporate FDs are not covered at all. That is the main reason to be cautious about chasing an extra 1.5% at a small finance bank with more than ₹5 lakh.

FD vs debt funds vs RBI bonds

The RBI Floating Rate Savings Bond, 2020 (Taxable) pays the prevailing NSC rate plus 0.35 percentage points, reset every six months. With NSC at 7.70%, the coupon is 8.05% for July to December 2026. Interest is paid out half-yearly and is fully taxable; there is no cumulative option. The seven-year lock-in is the real cost, though depositors above 60 have limited early-exit windows.

For a horizon under three years an FD is usually the sensible default. Beyond five years, an FD earning 7% before tax is roughly a 4.8% return for someone in the 30% slab, which is close to inflation. Money you genuinely will not need for a decade belongs in equity through a SIP, not in a deposit.