FD Calculator
Know your fixed deposit maturity value before you book it — amount, interest rate and tenure in, quarterly-compounded maturity amount and interest earned out.
Year-wise growth
| Year | Invested | Value at year end |
|---|---|---|
| 1 | ₹1,00,000 | ₹1,06,660 |
| 2 | ₹1,00,000 | ₹1,13,764 |
| 3 | ₹1,00,000 | ₹1,21,341 |
| 4 | ₹1,00,000 | ₹1,29,422 |
| 5 | ₹1,00,000 | ₹1,38,042 |
What is a Fixed Deposit (FD)?
A Fixed Deposit (FD) — also known as a Term Deposit — is India's most trusted fixed-income savings vehicle offered by commercial banks, Small Finance Banks, NBFCs, and India Post. A saver parks a lump-sum amount for a fixed tenure (ranging from 7 days up to 10 years) at a guaranteed interest rate that is locked in on the booking date, completely immune to subsequent market or policy rate drops.
Indian commercial banks follow a statutory quarterly compounding convention for cumulative FDs: interest is credited at the end of each calendar quarter and added to the principal to earn further interest. This calculator models standard cumulative FDs, monthly/quarterly payout non-cumulative FDs, and 5-year tax-saving deposits.
Cumulative vs Non-Cumulative FDs & Compounding Frequency
Depositors must choose between two distinct deposit structures based on their cash flow requirements:
- Cumulative FDs (Reinvestment Plan): Interest is compounded quarterly and paid out together with the principal only at maturity. Ideal for long-term wealth accumulation where you do not need periodic payouts.
- Non-Cumulative FDs (Income Plan): Interest is paid out periodically (monthly, quarterly, half-yearly, or annually) directly into your savings account. Ideal for retirees seeking regular income to meet household living expenses.
- Senior Citizen Premium: Commercial banks typically offer an additional 0.50% to 0.75% per annum interest rate premium to individuals aged 60 years and above (Super seniors aged 80+ often receive up to 0.80% extra).
The Quarterly Compounding FD Formula
A = P × [ 1 + (r ÷ 4) ]^(4 × t)
- A — Total maturity value received at the end of the tenure.
- P — Principal amount deposited (₹1,000 to ₹5 Crore+).
- r — Annual interest rate expressed as a decimal (e.g. 7.0% → 0.07).
- t — Deposit tenure in years (broken tenures like 18 months are converted to 1.5 years).
- 4 — Represents the statutory quarterly compounding frequency applied by Indian banks.
A Worked Example: ₹1,00,000 Invested at 7.0% for 5 Years
Financial Impact of Quarterly Compounding on a ₹1 Lakh Fixed Deposit:
- Principal Invested: ₹1,00,000
- Interest Rate: 7.00% per annum (compounded quarterly)
- Tenure: 5 Years (20 Compounding Quarters)
- Maturity Value: ₹1,41,477.82 (~₹1.41 Lakh)
- Total Interest Earned: ₹41,477.82
Without compounding (simple interest), the return would be only ₹35,000. Quarterly compounding generates an extra ₹6,478 in risk-free interest!
FD Maturity Values for ₹1 Lakh Deposit Across Rates and Tenures
| Interest Rate (p.a.) | 1 Year (4 Qtrs) | 2 Years (8 Qtrs) | 3 Years (12 Qtrs) | 5 Years (20 Qtrs) |
|---|---|---|---|---|
| 6.50% p.a. | ₹1,06,660 | ₹1,13,764 | ₹1,21,341 | ₹1,38,042 |
| 7.00% p.a. | ₹1,07,186 | ₹1,14,888 | ₹1,23,144 | ₹1,41,478 |
| 7.50% p.a. | ₹1,07,714 | ₹1,16,022 | ₹1,24,972 | ₹1,44,995 |
| 8.00% p.a. (Senior/SFB) | ₹1,08,243 | ₹1,17,166 | ₹1,26,824 | ₹1,48,595 |
| 8.50% p.a. (Special) | ₹1,08,775 | ₹1,18,320 | ₹1,28,702 | ₹1,52,279 |
Values calculated using quarterly compounding. Rates vary across tenures and banks. DICGC insures deposits up to ₹5 Lakh per bank per depositor.
Taxation Rules: Section 194A TDS, Form 15G/15H & 5-Year Tax Saver FDs
Understanding the tax rules on fixed deposits avoids unexpected deductions and tax demands:
- Slab-Rate Taxation: FD interest is fully taxable under "Income from Other Sources" at your applicable slab rate under both Old and New Tax Regimes.
- TDS Thresholds (Section 194A): Banks deduct 10% TDS if interest across all branches of a bank exceeds ₹50,000 per financial year (₹1,00,000 for senior citizens). If PAN is not provided, TDS is deducted at 20%.
- Form 15G / 15H: If your total annual income is below the taxable threshold, submit Form 15G (for individuals under 60) or Form 15H (for senior citizens aged 60+) in April to prevent TDS deductions.
- 5-Year Tax Saver FD: Carries a mandatory 5-year lock-in and qualifies for Section 80C deduction up to ₹1,50,000 (Old Tax Regime). However, the interest earned remains fully taxable.
Fixed deposit questions, answered
Crucial answers on quarterly compounding, TDS thresholds, Form 15G/15H, DICGC insurance, and premature withdrawal penalties.
Under Reserve Bank of India (RBI) directives, Indian commercial banks follow a quarterly compounding convention for all cumulative term deposits exceeding 6 months. This ensures depositors earn interest on interest every 3 months, resulting in an effective annual yield that is higher than the nominal contracted rate.
Under Section 194A of the Income Tax Act, banks deduct 10% TDS if your total interest across all branches of a single bank exceeds ₹50,000 in a financial year (or ₹1,00,000 for senior citizens). If your PAN is not updated, TDS is deducted at 20%.
If your estimated total taxable income for the financial year is below the basic tax exemption limit, you can submit Form 15G (for individuals under 60) or Form 15H (for senior citizens) to your bank at the beginning of each financial year (in April) to avoid TDS.
No. FD interest is treated as "Income from Other Sources" and is fully taxable at your applicable income tax slab rate under both the Old and New Tax Regimes. However, under the New Regime for FY 2025-26, no tax is payable if total taxable income is up to ₹12 Lakh (₹12.75 Lakh for salaried) due to the Section 87A rebate.
Yes. Under Section 80TTB (Old Tax Regime), senior citizens aged 60 and above can claim an income tax deduction of up to ₹50,000 per financial year on interest earned from bank and post office fixed deposits and savings accounts.
Banks typically levy a penalty of 0.50% to 1.00% on the applicable interest rate for the period the deposit actually remained with the bank. 5-Year Tax-Saving FDs (under Section 80C) carry a statutory 5-year lock-in and cannot be closed prematurely under any circumstance.
Yes, up to the statutory limit. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the RBI, provides insurance coverage of up to ₹5,00,000 (₹5 Lakh) per depositor per bank, covering both principal and interest across all branches of that bank.
Yes. Most banks permit an overdraft or loan against FD of up to 90% to 95% of your deposit value. The interest rate charged is typically only 1% to 2% above your contracted FD interest rate, without breaking your deposit or forfeiting accumulated interest.
In a Cumulative FD, interest is reinvested every quarter and paid out as a lump sum upon maturity. In a Non-Cumulative FD, interest is paid out periodically (monthly, quarterly, or annually) into your bank account, making it ideal for retirees needing cash flow.
A 5-Year Tax Saving FD carries a statutory 5-year lock-in and qualifies for income tax deductions up to ₹1,50,000 under Section 80C (Old Tax Regime). Unlike standard FDs, tax-saving FDs cannot be closed prematurely, cannot be pledged for loans, and interest remains fully taxable.