FD Calculator
Calculate your Fixed Deposit maturity amount and interest earned with different compounding frequencies.
🏦FD Details
Principal
₹5.00 L
Interest Earned
₹2.07 L
Principal vs Interest
FD Growth Over Time
How the FD Calculator Works
What Is a Fixed Deposit and Why Indians Rely on It
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum with a bank or NBFC for a fixed period at a predetermined interest rate. It's the oldest and most trusted savings product in India — over 90% of Indian households have at least one FD. The appeal is simple: guaranteed returns, zero market risk, and predictable maturity.
FDs are ideal for capital preservation, short-term goals (1–3 years), and emergency fund parking. The interest rate depends on tenure (longer = higher, usually), the bank (smaller banks and NBFCs offer higher rates), and your age (senior citizens typically get 0.5% extra).
The main drawback is tax inefficiency. FD interest is fully taxable at your marginal rate (up to 39% with cess for high earners), which means the effective return on a 7% FD for a 30% bracket taxpayer is closer to 4.9%. Over long periods, this makes FDs significantly worse than equity or even PPF for wealth building.
Simple vs Compound Interest: The Critical Difference
FDs typically use compound interest, where interest is reinvested and earns interest in subsequent periods. The compounding frequency can vary: monthly, quarterly, half-yearly, or yearly. More frequent compounding produces slightly higher returns.
The formula is: A = P × (1 + r/n)^(n×t), where P is principal, r is the annual rate, n is compounding periods per year, and t is years. For a ₹5 lakh FD at 7% for 5 years: quarterly compounding gives ₹7.07 lakh; yearly compounding gives ₹7.01 lakh — a ₹6,000 difference from compounding frequency alone.
Most Indian banks default to quarterly compounding for FDs. Some offering monthly payouts or cumulative FDs use monthly compounding. For maximum returns, choose cumulative (reinvested) FDs with the most frequent compounding offered.
TDS, Form 15G/15H, and Tax Planning
Banks deduct 10% TDS on FD interest if your total interest income exceeds ₹40,000/year (₹50,000 for senior citizens). This is a 'tax deducted at source' mechanism, not a final tax — you settle the rest when filing your return.
If your total income is below the taxable threshold, you can submit Form 15G (for non-seniors) or Form 15H (for seniors) to avoid TDS. Failing to submit these means the bank withholds tax that you then have to claim back via ITR — a cash flow headache.
For tax-saving purposes, a 5-year tax-saving FD qualifies for Section 80C deduction up to ₹1.5 lakh. But the returns are poor compared to ELSS, PPF, or NPS. Use tax-saving FDs only if you've already maxed out the better options.
Step-by-Step Worked Example
You deposit ₹5,00,000 in a 5-year FD at 7% annual interest with quarterly compounding. This is a typical scenario for a conservative investor parking a lumpsum.
- 1Compounding frequency (n) = 4 (quarterly).
- 2Quarterly rate = 7% ÷ 4 = 1.75%.
- 3Number of quarters = 5 years × 4 = 20 quarters.
- 4Maturity = ₹5,00,000 × (1.0175)^20.
- 5(1.0175)^20 = 1.4148.
- 6Maturity = ₹5,00,000 × 1.4148 = ₹7,07,389.
- 7Interest = ₹7,07,389 − ₹5,00,000 = ₹2,07,389.
Result
Principal deposited: ₹5,00,000
Interest earned over 5 years: ₹2,07,389
Maturity amount: ₹7,07,389
Effective annual yield: 7.19% (slightly higher than nominal 7% due to quarterly compounding)
TDS deducted (if applicable): ₹20,739 (10% of interest, if interest exceeds ₹40,000/year)
Post-tax return for 30% bracket taxpayer: approximately 4.9% per year
Key Benefits & Use Cases
When to Use This Tool
- ✓Parking emergency fund money for guaranteed safety and liquidity.
- ✓Saving for short-term goals (1–3 years) — a car, a wedding, a home down payment.
- ✓Preserving capital for risk-averse investors or those near retirement.
- ✓Section 80C tax saving via 5-year tax-saving FDs (though alternatives are usually better).
- ✓Generating regular interest income (non-cumulative FDs paying monthly/quarterly interest).
Why It Matters
- →Guaranteed returns — zero market risk, backed by DICGC insurance up to ₹5 lakh per depositor per bank.
- →Predictable maturity amount — you know exactly what you'll receive.
- →Flexible tenure options: 7 days to 10 years.
- →Senior citizens get 0.5–0.75% extra interest, improving retirement income.
- →Loan against FD available up to 90% of deposit value.
- →Simple to open and manage — no market knowledge required.
Who Should Use This Calculator
- ★Risk-averse investors who prioritise capital safety over growth.
- ★Anyone building an emergency fund (3–6 months of expenses).
- ★Investors with short-term goals less than 3 years away.
- ★Senior citizens seeking regular income with minimal risk.
- ★Conservative investors as part of a diversified portfolio (alongside equity).
Safe Investment
FDs are one of the safest investment options with guaranteed returns.
Compounding Options
Compare monthly, quarterly, half-yearly and yearly compounding.
Growth Chart
Visualize how your FD grows over the investment period.
How to Use
Enter Deposit
Set your FD investment amount.
Set Rate
Enter the FD interest rate offered by your bank.
Choose Tenure
Select FD duration from 1 to 10 years.
View Maturity
See maturity amount and interest earned.
The Formula
A = P × (1 + r/n)^(n×t)Frequently Asked Questions
What is a Fixed Deposit?
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum for a fixed period at a predetermined interest rate. It offers guaranteed returns with zero market risk, backed by DICGC insurance up to ₹5 lakh per depositor per bank.
Is FD interest taxable?
Yes, FD interest is fully taxable at your marginal rate under the old regime. TDS of 10% is deducted if interest exceeds ₹40,000/year (₹50,000 for seniors). Submit Form 15G/15H to avoid TDS if your income is below the taxable threshold.
Which compounding is better?
More frequent compounding gives slightly higher returns. Monthly > Quarterly > Half-yearly > Yearly. On a ₹5 lakh FD at 7% for 5 years, monthly compounding yields roughly ₹800 more than yearly compounding.
Can I break FD before maturity?
Yes, premature withdrawal is allowed but usually with a penalty of 0.5–1% reduction in the applicable interest rate. Some banks allow penalty-free premature withdrawal for specific tenures (like 1 year).
What is the 5-year tax saving FD?
A 5-year tax-saving FD qualifies for Section 80C deduction up to ₹1.5 lakh, but has a 5-year lock-in with no premature withdrawal allowed. Returns are poor compared to ELSS or PPF — use it only as a last resort for 80C.
Are FDs safe if the bank fails?
Yes, up to ₹5 lakh per depositor per bank is insured by DICGC (Deposit Insurance and Credit Guarantee Corporation). Above that, you're an unsecured creditor if the bank fails. To be fully safe, spread large deposits across multiple banks.
What is the best tenure for an FD?
It depends on your goal. For emergency funds, keep 6–12 months tenure with auto-renewal. For short-term goals (1–3 years), match the FD tenure to the goal date. Longer tenures (5+ years) generally offer higher rates but lock your money in a low-return instrument.
FD vs PPF: which is better?
PPF wins for long-term goals — tax-free returns (EEE status), higher effective yield after tax, and compounding over 15+ years. FDs win for short-term liquidity and emergency parking — no lock-in, immediate access. Match the instrument to the goal duration.
Reviewed by AutoWealthLab Editorial Team
This calculator and its accompanying guide are maintained by the AutoWealthLab editorial team. Every formula is verified against standard financial references, and results are cross-checked with independent calculators before publishing. Our tools are updated whenever tax rules, interest rate benchmarks, or regulatory formulas change.
Last reviewed: October 2026 · Methodology: Standard amortization and compound interest models · Learn more about our testing process