What is a Fixed Deposit (FD)?
A Fixed Deposit (FD) lets you deposit a lump sum with a bank, post office or NBFC for a fixed period at a fixed interest rate. It is one of the safest and most popular ways to earn assured returns in India. Tenures range from 7 days to 10 years, and interest can be paid out regularly or added back to the deposit and paid at maturity (a cumulative FD).
This FD calculator shows the maturity amount and total interest for any deposit, rate and tenure, with monthly, quarterly, half-yearly or yearly compounding.
FD Maturity Formula
A = maturity amount · P = principal · r = annual rate (decimal)
n = compounding times per year (quarterly = 4) · t = years
Most Indian banks compound FD interest quarterly, so the calculator uses n = 4 by default.
| ₹1,00,000 at 7% for 5 years | Maturity amount |
|---|---|
| Yearly compounding | ₹1,40,255 |
| Quarterly compounding | ₹1,41,478 |
| Monthly compounding | ₹1,41,763 |
More examples at 7% (quarterly)
- ₹1,00,000 for 1 year: ₹1,07,186
- ₹5,00,000 for 3 years: ₹6,15,720
- ₹10,00,000 for 10 years: ₹20,01,597
FD Interest Tax and TDS
- FD interest is added to your income and taxed at your slab rate every year, even if you receive it only at maturity.
- The bank deducts 10% TDS if interest from that bank exceeds ₹50,000 a year (₹1,00,000 for senior citizens). The rate is 20% if you have not given your PAN.
- If your total income is below the taxable limit, submit Form 15G (below 60) or Form 15H (60 and above) at the start of the year to avoid TDS.
- A tax-saver FD has a 5-year lock-in and qualifies for a deduction of up to ₹1.5 lakh under Section 80C in the old regime.
Types of FD
- Cumulative FD: interest is reinvested and paid with the principal at maturity. Best for building a corpus.
- Non-cumulative FD: interest is paid monthly, quarterly or yearly. Best for regular income.
- Senior citizen FD: banks usually pay an extra 0.25% to 0.50%.
- Tax-saver FD: 5-year lock-in with a Section 80C deduction.
How to Use This FD Calculator
- Enter the deposit amount.
- Enter the interest rate offered by your bank.
- Select the tenure and the compounding frequency.
- See the maturity amount and interest. Save the report with Preview & Save.
Compare with other safe options: recurring deposit, PPF (tax-free) and SCSS for senior citizens.
Premature Withdrawal and Safety
Most banks allow you to break an FD early, usually with a penalty of 0.5% to 1% on the interest rate. Bank deposits are insured by DICGC up to ₹5 lakh per depositor per bank (principal and interest together), so spreading very large deposits across banks adds safety.
FD Strategies: Laddering and Choosing a Tenure
- FD laddering: split a large sum across FDs of different tenures (1, 2, 3 years) so that one matures every year. You keep liquidity and can reinvest at new rates.
- Match the tenure to the goal. Do not lock money for 5 years if you might need it in 2.
- Check the post-tax return. At a 30% tax slab a 7% FD gives about 4.8% after tax, which can be lower than inflation. Compare with tax-free options such as PPF.
- Senior citizens get higher rates and a higher TDS limit, and can also look at SCSS.