Fixed Deposit Calculator
Calculate your Fixed Deposit maturity amount and interest earnings with compound interest calculations.
How to Use the FD Calculator?
Enter your principal amount, interest rate, tenure, and compounding frequency to calculate your FD returns.
What is a Fixed Deposit?
A Fixed Deposit (FD) is a financial instrument provided by banks and NBFCs where you can deposit money for a fixed period at a predetermined interest rate. Key features include:
- Guaranteed returns at a fixed interest rate
- Capital protection with no risk of loss
- Flexible tenure options from 7 days to 10 years
- Compound interest calculations for better returns
Benefits of Fixed Deposits
- Safety: Your principal amount is completely safe
- Guaranteed Returns: Fixed interest rate ensures predictable returns
- Loan Against FD: Can be used as collateral for loans
- Tax Benefits: Tax-saving FDs available under Section 80C
Compounding Frequency Impact
The frequency of compounding affects your returns:
- Annual: Interest compounded once a year
- Semi-Annual: Interest compounded twice a year
- Quarterly: Interest compounded four times a year (most common)
- Monthly: Interest compounded twelve times a year
How Fixed Deposit Interest Is Calculated
Most banks calculate FD returns using compound interest with the formula A = P × (1 + r/n)n×t, where P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the tenure in years. The maturity amount A minus the principal gives your total interest earned. Because interest is added back to the balance at each compounding step, you earn interest on previously earned interest — the core advantage of compounding.
Worked example: Suppose you deposit ₹1,00,000 for 5 years at 7% interest compounded quarterly (n = 4). Then A = 1,00,000 × (1 + 0.07/4)4×5 = 1,00,000 × (1.0175)20 ≈ ₹1,41,478. You earn around ₹41,478 in interest. Had the same deposit compounded only annually, the maturity value would be about ₹1,40,255 — quarterly compounding adds over ₹1,200 simply because interest is credited more frequently.
Cumulative vs Non-Cumulative FDs
A cumulative FD reinvests the interest and pays the entire amount at maturity — best for those who want to grow a lump sum and do not need regular income. A non-cumulative FD pays out interest at fixed intervals (monthly, quarterly, or yearly), making it suitable for retirees and others who rely on the interest as income. Cumulative deposits generally produce a higher final value because the interest keeps compounding instead of being withdrawn.
FD Taxation and TDS
Interest earned on a fixed deposit is fully taxable and added to your income under “Income from Other Sources.” Banks deduct TDS (Tax Deducted at Source) at 10% if your total FD interest in a financial year exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable limit, you can submit Form 15G (or 15H for senior citizens) to avoid TDS. Note that tax is payable on the interest as it accrues each year, even on cumulative deposits where you receive the money only at maturity.
FD vs Other Common Investments
| Feature | Fixed Deposit | PPF | Mutual Funds |
|---|---|---|---|
| Risk | Very low | Very low | Market-linked |
| Returns | Fixed, moderate | Fixed, tax-free | Variable, potentially higher |
| Lock-in | 7 days to 10 years | 15 years | None (except ELSS) |
| Taxation | Interest taxable | Fully tax-free | Capital gains tax |
Tips to Maximise FD Returns
- Use FD laddering: Split your money across deposits of different tenures so funds mature at staggered intervals, giving liquidity while capturing higher long-term rates.
- Compare across banks: Small finance banks and NBFCs often offer rates 0.5–1% higher than large banks for the same tenure.
- Senior citizen rates: Most banks add 0.25–0.50% extra for senior citizens — use a parent's account where appropriate.
- Avoid premature withdrawal: Breaking an FD early usually attracts a penalty of 0.5–1% on the applicable rate, eroding your returns.
Frequently Asked Questions — FD Calculator
A Fixed Deposit is a financial instrument offered by banks and NBFCs where you deposit a lump sum for a fixed tenure at a predetermined interest rate. Unlike a savings account, the interest rate is locked in for the entire tenure regardless of market changes, guaranteeing predictable returns.
As of FY 2024-25, major banks offer 6.5–7.5% for general citizens on 1–3 year tenures. Senior citizens typically receive an additional 0.25–0.50%. Small finance banks (e.g., Unity, Utkarsh) offer up to 9% but carry higher risk. Always check DICGC insurance coverage (₹5 lakh per depositor per bank).
Compound interest FD: A = P × (1 + r/n)^(n×t), where P = principal, r = annual rate, n = compounding frequency (quarterly is standard), t = tenure in years. Simple interest FD: A = P × (1 + r×t). Quarterly compounding gives slightly higher returns than annual compounding at the same stated rate.
Yes. FD interest is fully taxable as "Income from Other Sources" at your applicable slab rate. Banks deduct TDS at 10% when annual interest exceeds ₹40,000 (₹50,000 for senior citizens). You can submit Form 15G (under 60) or 15H (senior citizen) to prevent TDS if your total income is below the taxable threshold.
In a cumulative FD, interest compounds and is paid at maturity with the principal — best for wealth building. In a non-cumulative FD, interest is paid out monthly, quarterly, or annually — ideal for retirees or anyone needing regular income. The principal is returned at the end in both cases.
A tax-saving FD has a mandatory 5-year lock-in and qualifies for deduction up to ₹1.5 lakh per year under Section 80C. Premature withdrawal is not allowed. However, the interest earned is still fully taxable at your slab rate. It is available at most scheduled banks and is suitable for conservative investors in higher tax brackets.