FD Calculator
Put in the deposit, the rate and the term. You get the maturity amount and the interest earned, calculated with quarterly compounding, which is what almost every Indian bank uses.
How banks calculate an FD
Indian banks compound fixed deposit interest quarterly on cumulative deposits. That means four times a year the interest earned is added to your balance, and the next quarter earns interest on the larger amount.
P is the deposit, r is the annual rate as a decimal, and t is the number of years. Quarterly compounding is why the amount you actually receive is a little more than a simple interest calculation suggests.
A worked example
Deposit ₹5,00,000 at 7.1 percent for 5 years, cumulative. Simple interest would give ₹1,77,500. Quarterly compounding gives roughly ₹2,10,900, so the maturity amount is about ₹7,10,900. The compounding is worth roughly ₹33,400 over the five years, and the effective annual yield works out to about 7.29 percent rather than the headline 7.1.
Cumulative or payout
A cumulative FD keeps the interest inside the deposit, so it compounds and you receive everything at maturity. A payout FD sends the interest to your account every month or quarter, so nothing compounds and you get a regular income instead.
On the same ₹5,00,000 at 7.1 percent for 5 years, cumulative earns about ₹2,10,900 and quarterly payout earns ₹1,77,500. The difference of roughly ₹33,400 is the price of receiving the money as you go. If you need the income, that is a fair price. If you do not, cumulative is simply better.
Tax, which people forget
FD interest is fully taxable as income from other sources, added to your total income and taxed at your slab rate. If you are in the 30 percent bracket, a 7.1 percent FD returns roughly 4.97 percent after tax, which may be close to or below inflation.
Banks also deduct TDS once interest across your deposits with that bank crosses the annual threshold. TDS is not the final tax. If your slab rate is higher you owe more at filing, and if your total income is below the taxable limit you can submit Form 15G, or 15H if you are a senior citizen, to stop the deduction.
Breaking an FD early
You can almost always withdraw early, but you are then paid the rate applicable to the period the money actually stayed, usually minus a penalty of around 0.5 to 1 percent. Break a 5 year deposit after 14 months and you receive roughly the 1 year rate less the penalty, not the 5 year rate. Splitting a large sum across several smaller deposits lets you break only the part you need.
Deposit insurance
Deposits with each bank are insured up to ₹5,00,000 per depositor by DICGC, covering principal and interest together across your savings and fixed deposits at that bank. If you hold substantially more than that, spreading it across banks is worth considering.
Common questions
Is FD interest compounded monthly?
Almost never. The Indian convention is quarterly compounding on cumulative deposits, and that is what this calculator uses. A few products compound annually. Payout deposits do not compound at all, because the interest leaves the deposit.
Do senior citizens get a better rate?
Yes, most banks add roughly 0.25 to 0.75 percent for depositors over 60. Enter the higher rate directly and the calculator will use it.
Is an FD better than a SIP?
They answer different questions. An FD gives a known return with essentially no risk to capital, which is what you want for money you will need within a few years. A SIP in equity offers a higher expected return over long periods with real volatility along the way. Money you need next year belongs in an FD. Money you will not touch for fifteen years usually does not.
How is TDS calculated on my FD?
The bank deducts tax at source once your interest from that bank crosses the annual threshold, and issues Form 16A. That deduction is an advance against your total tax, not a settlement. You still declare the full interest at filing and pay any balance, or claim a refund if too much was withheld.
Can I take a loan against my FD?
Usually yes, typically up to 90 percent of the deposit value, at a rate one to two percent above the FD rate. It is often cheaper than a personal loan and it avoids breaking the deposit and losing the higher long term rate.