FD Calculator
Calculate your FD maturity amount and interest for any compounding frequency.
🏦 What is a Fixed Deposit?
A Fixed Deposit (FD) is one of India's most popular and trusted savings instruments. It is a financial product offered by banks, small finance banks, and NBFCs (Non-Banking Financial Companies) where you deposit a lump sum amount for a predetermined period at a guaranteed interest rate. Unlike a savings account where the interest rate can change, the FD interest rate is locked in at the time of booking and does not change for the entire tenure, regardless of market conditions.
FDs are considered one of the safest investment options in India. Bank FDs up to ₹5 lakh are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India. This means even if a bank fails, deposits up to ₹5 lakh per depositor per bank are protected. This insurance, combined with guaranteed returns, makes FDs the go-to choice for risk-averse investors, retirees, and those parking short-term funds.
Indian banks typically compound FD interest quarterly for cumulative (reinvestment) FDs. This means interest is calculated and added to the principal every three months, and the next quarter's interest is computed on this larger balance. Over multi-year tenures, this quarterly compounding produces noticeably higher returns than simple interest. A 7% rate with quarterly compounding has an effective annual yield of (1 + 0.07/4)^4 - 1 = 7.19%.
There are two main types of FDs in terms of interest payout: cumulative FDs where interest is reinvested and paid at maturity (higher total return), and non-cumulative FDs where interest is paid out monthly, quarterly, or annually (useful for retirees needing regular income). This calculator computes the cumulative FD maturity value with compounding at your chosen frequency.
Interest earned on FDs is fully taxable as "Income from Other Sources." If total FD interest across all branches and banks exceeds ₹40,000 per financial year (₹50,000 for senior citizens aged 60 and above), the bank deducts TDS at 10%. If your total income is below the taxable limit, you can submit Form 15G (or 15H for seniors) to request that TDS not be deducted.
📐 FD Maturity Formula
Interest Earned = A − P. Effective Annual Rate (EAR) = (1 + r/n)n − 1. For example, 7% compounded quarterly gives EAR = (1.0175)4 − 1 = 7.186%, which is the actual annual growth rate on your deposit.
📖 How to Use This Calculator
Steps to Calculate FD Maturity
💡 Example Calculations
Example 1 — Standard 1-Year FD
₹5,00,000 at 7% p.a. for 1 year, quarterly compounding
Example 2 — 5-Year FD for Long-term Savings
₹2,00,000 at 7.5% p.a. for 5 years, quarterly compounding
❓ Frequently Asked Questions
🔗 Related Calculators
What is a Fixed Deposit (FD)?
A Fixed Deposit is a savings instrument offered by banks and NBFCs where you deposit a lump sum for a fixed period at a predetermined interest rate. The rate does not change during the FD tenure, regardless of market conditions. At maturity, you receive the principal plus accumulated interest.
How is fixed deposit interest calculated?
For reinvestment (cumulative) deposits, banks use compound interest: A = P(1 + r/n)^(nt), where n is the compounding frequency. For non-cumulative deposits, interest is paid out periodically and not compounded. Check your bank's product terms for the specific compounding frequency used.
What is the difference between cumulative and non-cumulative FD?
A cumulative FD reinvests the interest back into the deposit, so interest compounds over the tenure and the full amount (principal + compound interest) is paid at maturity. A non-cumulative FD pays interest at regular intervals (monthly, quarterly, etc.) without compounding. Cumulative FDs produce a higher total return.
Is fixed deposit interest taxable?
Yes, in most countries. Interest earned on fixed deposits is typically taxed as regular income at your applicable tax rate. Tax rules vary by country - some may withhold tax at source, others require you to declare it in your annual return. Consult your local tax authority for specifics.
What is the FD maturity formula?
A = P(1 + r/n)^(nt), where A is the maturity amount, P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year (4 for quarterly), and t is the time in years. Interest = A - P.
What is the maturity amount for a ₹1 lakh FD at 7% for 2 years?
With quarterly compounding (standard for most Indian banks): A = 1,00,000 × (1.0175)^8 = 1,14,888. Interest earned = ₹14,888. Senior citizens typically earn 0.25–0.5% extra; at 7.5% quarterly for 2 years, interest = ₹16,136.
Is FD interest taxable?
Yes. FD interest is added to your income and taxed at your applicable slab rate. If annual FD interest from one bank exceeds ₹40,000 (₹50,000 for senior citizens), the bank deducts TDS at 10%. Submit Form 15G (or Form 15H for senior citizens) to avoid TDS when your total income is below the taxable limit.
Is a fixed deposit better than a SIP?
FDs offer guaranteed capital protection with fixed returns (typically 6.5–7.5%). SIPs in equity funds have historically returned 12–15% over 15+ year periods but carry market risk. For goals within 1–3 years or for emergency funds, FD is better. For 10+ year wealth creation goals, equity SIPs have significantly outperformed FDs historically.
Can I break an FD before maturity and what is the penalty?
Yes, most FDs can be closed before maturity with a penalty of 0.5–1% below the applicable rate for the period held. Tax-saving FDs (5-year lock-in under Section 80C) cannot be prematurely closed. Some banks allow partial withdrawal of sweep-in FDs with no penalty.