Tools To India

FD Calculator

Enter your deposit amount, the rate the bank is offering and the tenure to see the maturity value and the interest you will earn.

Last updated

₹5 Lakh

Indian banks compound cumulative fixed deposits quarterly by convention.

The result updates as you type. Nothing you enter is saved, sent to a server or shared.

Maturity amount

₹7,07,389

₹2,07,389 of interest on a ₹5,00,000 deposit

Principal versus interest

  • Principal: ₹5,00,000
  • Interest: ₹2,07,389
Principal
₹5,00,000
Interest earned
₹2,07,389
Maturity amount
₹7,07,389
Effective annual yieldHigher than the quoted rate because interest compounds within the year.
7.19%
  • This is a cumulative FD, where interest stays in the deposit and compounds. A non-cumulative FD pays interest out monthly or quarterly instead, so the maturity value is just the principal.
  • Interest on a fixed deposit is fully taxable at your slab rate, in the year it accrues. The figures above are before tax.

How this calculator works

A fixed deposit pays a rate agreed at the outset for a fixed term. What people often miss is that the quoted rate is not what you actually earn, because banks compound cumulative deposits quarterly. Interest earned in the first quarter starts earning interest itself from the second, so the effective yield sits slightly above the headline rate.

That gap widens with the rate and the tenure. At 7% compounded quarterly, the effective annual yield is about 7.19%. Over five years, that difference is worth several thousand rupees on a ₹5 lakh deposit.

A cumulative FD leaves interest inside the deposit to compound. A non-cumulative FD pays it out monthly or quarterly, which suits someone living off the income but produces a smaller total because nothing compounds. This calculator models the cumulative version.

Deposits with each bank are insured up to a limit per depositor per bank by the Deposit Insurance and Credit Guarantee Corporation. Spreading very large amounts across banks is a common way to stay within that cover.

The formula

Compound interest with periodic compounding

A = P × (1 + r ÷ n)^(n × t)

P
Deposit amount
r
Annual rate as a decimal
n
Compounding periods per year — 4 for quarterly
t
Tenure in years

Effective annual yield

Effective yield = ((1 + r ÷ n)ⁿ − 1) × 100

This is the figure to compare when two banks quote the same nominal rate but compound differently.

Worked example: ₹5 lakh at 7% for 5 years

Lakshmi places ₹5,00,000 in a cumulative fixed deposit at 7% for five years, compounded quarterly.

Step-by-step calculation for the worked example
Principal₹5,00,000
Quarterly rate (7 ÷ 4)1.75%
Number of quarters20
Growth factor (1.0175)²⁰1.41478
Maturity amount₹7,07,389
Interest earned₹2,07,389
Effective annual yield7.186%
Interest if compounded yearly instead₹2,01,915

Quarterly compounding earns Lakshmi about ₹5,474 more than annual compounding on the same nominal rate. Her interest is fully taxable at her slab rate, so the post-tax return is meaningfully lower than the headline figure.

Things worth knowing

  • FD interest is fully taxable at your slab rate, and it is taxed in the year it accrues, not the year you receive it. For someone in the 30% bracket, a 7% FD returns under 5% after tax.
  • Banks deduct TDS once interest crosses an annual threshold, with a higher threshold for senior citizens. If your total income is below the taxable limit, you can submit Form 15G or 15H to prevent the deduction. TDS is not the same as final tax — you still declare the interest when filing.
  • Breaking an FD early usually means the rate is recalculated to whatever applied for the period actually completed, minus a penalty. The maturity figure above assumes you hold it to term.
  • Deposits are insured up to a specified limit per depositor per bank, covering principal and interest together, by the DICGC. Very large amounts are often split across banks for this reason.
  • Senior citizens typically get a higher rate at most banks. Enter the rate you are actually offered rather than the standard one.
  • Compare the effective annual yield rather than the nominal rate when two banks compound differently.

Frequently asked questions

Is FD interest taxable?
Yes, entirely, at your income tax slab rate, and in the year it accrues rather than the year it is paid. There is no special concessional rate for fixed deposit interest. Banks deduct TDS above an annual threshold, but that is only an advance — the full amount still has to be declared when you file.
How often do banks compound FD interest?
Quarterly is the convention for cumulative deposits at most Indian banks, though some products differ. It matters: quarterly compounding turns a 7% nominal rate into roughly 7.19% effective. Confirm the frequency before comparing two offers.
What happens if I break an FD early?
The bank recalculates interest at the rate that applied for the period you actually held it, then usually applies a penalty of around 0.5% to 1%. You do not simply forfeit the interest, but you receive noticeably less than the maturity figure. Some banks offer FDs with no premature withdrawal penalty at a slightly lower rate.
Is a tax-saving FD different?
Yes. A five-year tax-saving FD qualifies for section 80C under the old regime, but it is locked for the full five years with no premature withdrawal and no loan against it. The interest remains fully taxable, so the benefit is on the amount invested, not the return.
How safe is a fixed deposit?
Bank deposits are insured up to a specified limit per depositor per bank by the DICGC, covering principal and interest together. Beyond that limit you are exposed to the bank itself. Deposits with non-banking finance companies are not covered by that insurance at all, which is part of why they often offer higher rates.

Sources

Every figure on this page is traceable to the official source below. If a source has changed since the date shown, please tell us and we will correct it.