Calculate maturity amount on your fixed deposit with quarterly compounding.
Interactive calculator loads below. JavaScript required for live calculations.
Formula
Maturity Amount (A) = P × (1 + r/n)^(n×t)
Where P is the principal deposited, r is the annual interest rate (as a decimal, so 7% becomes 0.07), n is the compounding frequency per year (1 = annual, 4 = quarterly, 12 = monthly), and t is the tenure in years.
Most Indian banks compound FD interest quarterly (n = 4) for cumulative deposits. Total interest earned = A − P.
Worked Examples
If you deposit ₹5,00,000 in a fixed deposit at 7.25% per annum for 5 years with quarterly compounding: A = 5,00,000 × (1 + 0.0725/4)^(4×5) = 5,00,000 × (1.018125)^20 ≈ ₹7,15,238. Interest earned = ₹2,15,238. The effective annual yield works out to 7.45% because of compounding within the year.
About the FD Calculator
The Fixed Deposit (FD) has been the cornerstone of Indian savings for generations. Despite the rise of mutual funds, the FD remains the gold standard for safety, predictability, and capital protection in India. Whether you are a senior citizen looking for regular monthly income or a young professional building an emergency fund, this FD calculator helps you find the exact maturity value after tax.
How FD Interest is Calculated in India
Most Indian banks (SBI, HDFC, PNB) use quarterly compounding for FDs with a tenure of 6 months or more. This means your interest is calculated every three months and added to the principal, so the interest for the next quarter is calculated on a larger amount. This leads to an 'Effective Annual Yield' that is slightly higher than the quoted interest rate. For example, a 7% interest rate with quarterly compounding results in an effective yield of roughly 7.19%. Our calculator handles this complexity automatically.
The Senior Citizen Advantage
In India, almost all banks offer an additional 0.50% interest rate to senior citizens (those aged 60 and above). During special schemes (like SBI's 'Amrit Vrishti'), this spread can go up to 0.75% or 1%. For a ₹10 Lakh deposit, an extra 0.5% translates to ₹5,000 extra per year. Always select the 'Senior Citizen' option if you are eligible to see the boosted returns.
Understanding TDS and Taxation on FDs
One of the most misunderstood aspects of FDs in India is taxation. FD interest is fully taxable based on your income tax slab.
1. TDS (Tax Deducted at Source): If your interest income exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), the bank is legally required to deduct 10% TDS. If you haven't provided your PAN card, they deduct 20%.
2. Form 15G/15H: If your total annual income is below the taxable limit, you can submit Form 15G (or 15H for seniors) to the bank to prevent them from deducting TDS.
3. Maturity vs Annual Tax: Even if your FD is for 5 years and pays out at the end, you must declare the interest earned every year in your Income Tax Return (ITR) based on the interest certificate provided by the bank.
Types of FDs: Cumulative vs Non-Cumulative
- Cumulative FDs: The interest is reinvested and paid at the end of the tenure. This is best for long-term wealth building as it maximizes the power of compounding.
- Non-Cumulative FDs: The interest is paid out at regular intervals (monthly or quarterly). This is ideal for retirees who need a steady cash flow to meet monthly expenses.
- Tax-Saving FDs: These have a mandatory 5-year lock-in and qualify for deduction under Section 80C (up to ₹1.5 Lakh). However, the interest earned remains taxable.
Strategic FD Investing: The Laddering Technique
Since FD rates fluctuate based on RBI's repo rate movements, 'laddering' is a smart strategy. Instead of putting ₹5 Lakh in one 5-year FD, split it into five FDs of ₹1 Lakh each with tenures of 1, 2, 3, 4, and 5 years. As each FD matures, reinvest it for 5 years. This ensures that a part of your money is always liquid every year and you are not locked into a low interest rate if rates rise in the future.
Frequently Asked Questions
How often is FD interest compounded in India?
Most Indian banks compound FD interest quarterly for cumulative deposits. Some private banks and small finance banks compound monthly, which slightly boosts the effective yield.
Is FD interest taxable?
Yes, FD interest is fully taxable as 'Income from Other Sources' at your slab rate. Banks also deduct TDS at 10% if your interest from a single bank exceeds ₹40,000 in a year (₹50,000 for senior citizens).
What is the difference between cumulative and non-cumulative FD?
In a cumulative FD, interest is compounded and paid at maturity along with the principal. In a non-cumulative FD, interest is paid out monthly, quarterly, half-yearly or annually as a regular income stream.
Are senior citizens entitled to a higher FD rate?
Yes, almost all Indian banks offer 0.25-0.75% extra on FDs for senior citizens (60+). Some banks offer an additional 0.10-0.25% for super seniors (80+).
Is my FD safe if the bank fails?
Yes, deposits up to ₹5 lakh per depositor per bank are insured by the DICGC, a subsidiary of RBI. This includes principal and interest combined.