FD Calculator

A Fixed Deposit, the most popular savings instrument in India, is essentially a contract: you give a bank or NBFC a sum of money for a fixed period, and the bank promises to pay a fixed rate of interest for the entire term. The FD rate is locked in on the day of deposit, regardless of what happens to the broader interest rate environment. This certainty is exactly why FDs remain the backbone of conservative Indian portfolios, especially for senior citizens and risk-averse savers.

The maturity amount on a fixed deposit is computed using compound interest. The interest earned in each compounding period is added to the principal, and the next period's interest is calculated on the higher base. The compounding frequency makes a measurable difference: a 7% rate compounded annually yields a 7.00% effective return, the same 7% compounded quarterly yields 7.19%, and compounded monthly yields 7.23%. Most Indian banks use quarterly compounding for cumulative FDs by default, so the effective yield is always slightly higher than the headline rate.

FD rates in India have moved through a wide range over the last decade — from over 9% in 2013-14 to as low as 5% in 2020-21, and back up to 7-7.5% in 2024-25 as RBI raised the repo rate. Small finance banks (Equitas, AU, Ujjivan, Suryoday) typically offer 0.5-1% higher rates than large private and public sector banks because they need to attract deposits faster. The trade-off is slightly higher operational risk, though all are RBI-regulated and DICGC-insured up to ₹5 lakh per depositor per bank.

Use this FD calculator to compare maturity amounts across rates, tenures and compounding frequencies. The same ₹5 lakh placed at 7% for 5 years yields ₹7.07 lakh at annual compounding, ₹7.15 lakh at quarterly, and ₹7.18 lakh at monthly. Over longer tenures and larger deposits, the difference becomes substantial.

Tax treatment is the most important nuance. FD interest is fully taxable at your slab rate as 'Income from Other Sources'. For someone in the 30% tax bracket, an apparent 7.5% FD effectively delivers around 5.25% post-tax, which barely beats inflation. Banks also deduct TDS at 10% (20% if PAN is not provided) once your interest from that bank exceeds ₹40,000 in a financial year — ₹50,000 for senior citizens. The TDS is adjusted against your total tax liability when you file ITR. To avoid TDS if your total income is below the taxable threshold, submit Form 15G (under 60) or Form 15H (60+) at the start of each financial year.

Senior citizens enjoy a meaningful rate premium of 0.25-0.75% across most banks, plus a higher TDS threshold and additional Section 80TTB deduction of ₹50,000 on interest income. For senior savers, FDs remain genuinely competitive with other low-risk instruments.

A tax-saving FD with a 5-year lock-in qualifies for Section 80C deduction up to ₹1.5 lakh, available only under the old tax regime. The interest is still fully taxable, so a tax-saving FD is rarely the most efficient way to use your 80C limit — ELSS funds or PPF generally offer better long-term returns. A regular FD without the 80C tag, used for short-term goals or as part of an emergency fund, is the more common use case.

Finally, laddering is a smart structuring trick. Instead of placing your entire savings in one 5-year FD, split it across 1-year, 2-year, 3-year, 4-year and 5-year FDs. As each one matures, you reinvest at the then-current rate, smoothing out interest rate cycles and giving you a portion of liquid funds every year without breaking any deposit early.