FD Calculator

What is a fixed deposit?

A fixed deposit (FD) is money you place with a bank or financial company for a fixed period at a fixed interest rate. The rate is locked in on the day you open the FD, so your return does not change even if interest rates move later.

FDs usually run from seven days to ten years. They are popular for emergency funds, short-term goals and for anyone who wants a predictable return with little risk.

How is FD interest calculated?

Most banks in India add interest to a cumulative FD every quarter, so the interest itself starts earning interest.

• A is the maturity amount, and A − P is the interest earned.
• P is the amount you deposit.
• r is the yearly interest rate, written as a decimal (7% is 0.07).
• t is the tenure in years.

For example, ₹1,00,000 at 7% for 5 years grows to about ₹1,41,478, so you earn about ₹41,478 in interest. That works out to an effective yield of about 7.19% a year.

Many banks pay simple interest on deposits of less than six months, and on any months left over after the last full quarter. The calculator follows the same approach.

Cumulative FD or interest payout?

Because monthly interest reaches you earlier, banks usually discount it a little. A common formula is monthly interest = P × r ÷ (1,200 + r), where r is the rate in percent. On ₹1,00,000 at 7%, that is about ₹580 a month rather than ₹583.

FD rates for senior citizens

Most banks offer customers aged 60 and above a higher FD rate, often around 0.5% a year more than the regular rate. Turn on Senior citizen in the calculator to add 0.5%, or enter the exact rate your bank quotes for your age and tenure for an accurate result.

How FD interest is taxed

• FD interest is added to your income and taxed at your slab rate, even in a cumulative FD where you receive it only at maturity.
• Banks deduct tax at source (TDS) when the interest you earn from them in a year crosses the TDS limit. You can claim it back or adjust it when you file your return.
• If your total income is below the taxable limit, you can submit the no-TDS declaration form your bank provides at the start of the year.
• Five-year tax-saver FDs qualify for a deduction under the old tax regime, but cannot be withdrawn before five years.

This calculator shows interest before tax. Tax rules and TDS limits change with the Budget, so check the current rules for your situation.

How safe is your FD?

Deposits in banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor per bank, covering principal and interest together. Deposits with non-bank finance companies are not covered, so check the company's credit rating before investing.

Breaking an FD early

Most FDs can be closed before maturity, but banks usually pay a lower rate, often 0.5% to 1% less than the rate for the period the money actually stayed, and some charge a penalty. If you might need part of the money early, consider splitting it across a few smaller FDs with different tenures.

Frequently asked questions