FD Calculator

What is a Fixed Deposit?

A Fixed Deposit (FD) is a bank or NBFC deposit where you invest a lump sum for a chosen tenure at a stated interest rate. It is popular for predictable, low-volatility savings because the rate is usually locked at booking, subject to the deposit's terms.

How this FD calculator works

Enter the deposit amount, annual rate, tenure and compounding frequency. The calculator compounds the deposit for the selected period and splits the maturity value into principal invested and interest earned. Figures are indicative only, not advice.

Types of fixed deposits in India

Banks and NBFCs package fixed deposits in several ways, and the type you pick changes both your return and how easily you can access the money:

• Cumulative FD: interest is compounded and paid together with the principal at maturity. This is what the calculator above models and it gives the highest maturity value because interest itself earns interest.
• Non-cumulative FD: interest is paid out monthly, quarterly, half-yearly or yearly. It suits retirees who want a regular income, but the maturity value is lower because interest is not reinvested.
• Tax-saving FD: a 5-year lock-in deposit that qualifies for a deduction of up to ₹1.5 lakh under Section 80C (old regime only). Premature withdrawal is not allowed.
• Senior citizen FD: people aged 60 and above usually earn an extra 0.25%–0.75% p.a. over the standard rate.
• Flexi / sweep-in FD: linked to your savings account so idle balances automatically move into an FD and back when you need cash.

Simple interest vs compound interest

Most bank FDs use compound interest, where each period's interest is added to the balance before the next period is calculated. A ₹1,00,000 deposit at 7% for 5 years grows to about ₹1,41,478 with quarterly compounding, versus ₹1,35,000 with plain simple interest — a difference of roughly ₹6,478 created purely by compounding. The more frequently interest compounds (monthly > quarterly > yearly), the higher your maturity value, so always check the compounding frequency your bank quotes, not just the headline rate.

How FD interest is taxed

Interest on a fixed deposit is fully taxable as "income from other sources" and is added to your total income at your slab rate — there is no special lower rate for FD interest. Banks deduct TDS at 10% once the interest across your FDs at that bank crosses ₹40,000 in a year (₹50,000 for senior citizens; these thresholds were raised for FY 2025-26). If your total income is below the taxable limit, submit Form 15G (or 15H for seniors) so the bank does not deduct TDS. Even if TDS is deducted, you must still report the full interest in your return and claim the TDS as credit — check your AIS/TIS. Use the ITR calculator to see the after-tax picture.

Tips to get more from a fixed deposit

• Ladder your FDs: split a large amount into deposits maturing in different years so you always have some liquidity and can re-book at prevailing rates.
• Compare across banks: small finance banks and NBFCs often pay 0.5%–1% more than large banks for the same tenure — but check deposit insurance (₹5 lakh per bank is covered by DICGC).
• Match tenure to your goal: breaking an FD early usually attracts a penalty of 0.5%–1% on the rate, wiping out part of your interest.
• Prefer cumulative if you don't need periodic payouts — reinvested interest measurably boosts the final corpus.

Fixed deposit vs other savings options

An FD offers capital protection and a guaranteed return, which a market-linked product like a mutual fund cannot. The trade-off is that the return is usually lower and is fully taxable. If you can lock money away for the long term and accept some volatility, a SIP in mutual funds has historically delivered higher returns; if you want disciplined monthly saving with FD-like safety, compare a recurring deposit or the tax-free PPF. Many people hold an FD for their emergency fund and short-term goals, and use SIP/PPF/NPS for long-term wealth.