Invested amount
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Interest earned
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Maturity amount
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Worked Examples
See how FD returns are calculated using the site's formulas with typical bank rates.
Example 1: 5-Year FD with Quarterly Compounding
Scenario: Invest ₹1,00,000 in a bank FD for 5 years at 7% p.a. with quarterly compounding
• Principal = ₹1,00,000
• Interest rate = 7% p.a.
• Tenure = 5 years
• Compounding = Quarterly (n = 4)
Calculation:
Maturity = ₹1,00,000 × (1 + 0.07/4)^(4×5)
Maturity = ₹1,00,000 × (1.0175)^20
Maturity = ₹1,00,000 × 1.4148 = ₹1,41,478
Interest earned = ₹1,41,478 - ₹1,00,000 = ₹41,478
Example 2: Senior Citizen FD (Higher Rate)
Scenario: Senior citizen invests ₹5,00,000 for 3 years at 7.5% p.a. with quarterly compounding
• Principal = ₹5,00,000
• Interest rate = 7.5% p.a. (senior citizen benefit)
• Tenure = 3 years
• Compounding = Quarterly
Maturity = ₹5,00,000 × (1 + 0.075/4)^(4×3)
Maturity = ₹5,00,000 × (1.01875)^12
Maturity = ₹5,00,000 × 1.2475 = ₹6,23,750
Interest earned = ₹1,23,750
Example 3: Short-Term FD with Simple Interest
Scenario: Some banks offer simple interest FDs for short tenures. Invest ₹2,00,000 for 1 year at 6.5%
• Principal = ₹2,00,000
• Interest rate = 6.5% p.a.
• Tenure = 1 year
• Interest type = Simple (non-cumulative)
Maturity = ₹2,00,000 × (1 + 0.065 × 1)
Maturity = ₹2,00,000 × 1.065 = ₹2,13,000
Interest earned = ₹13,000
Common Mistakes to Avoid
Ignoring TDS on FD interest
Banks deduct 10% TDS if your annual interest income exceeds ₹40,000 (₹50,000 for senior citizens). If you have no tax liability, submit Form 15G/15H to avoid TDS. FD interest is always taxable as per your slab, regardless of whether TDS was deducted. This calculator shows gross maturity before tax.
Breaking FD prematurely
Premature withdrawal attracts a penalty of 0.5-1% on the interest rate, and you only get interest for the actual tenure held (not the original tenure). If you break a 5-year 7% FD after 2 years, you might get 5.5% for 2 years instead of 6% for 2 years. Plan liquidity needs upfront and use laddering or sweep-in FDs.
Putting all savings in FDs
FD returns (6-7%) often barely beat inflation (5-6%). After tax, your real return may be near zero or negative. For long-term goals (>5 years), equity or hybrid mutual funds historically offer better inflation-adjusted returns. Use FDs for emergency funds and short-term goals, not as your only investment.
Not comparing bank vs post office FD rates
Post office FDs sometimes offer 0.25-0.5% higher rates than banks. Small finance banks (e.g., Ujjivan, Equitas) may offer 0.5-1% more than large banks, but check DICGC insurance (deposit insurance up to ₹5L per bank). Compare rates at bankbazaar or paisabazaar before opening an FD.
Choosing cumulative FD when you need regular income
Cumulative FDs (compound interest) reinvest earnings until maturity. Non-cumulative FDs pay interest monthly/quarterly/yearly. Retirees needing monthly income should choose non-cumulative with monthly payouts. Cumulative FDs give higher maturity amounts but no interim cash flow.
Missing the senior citizen rate benefit
Most banks give 0.25-0.5% higher rates to senior citizens (60+ years). Always mention age when opening an FD. The extra 0.5% on ₹10L for 5 years is about ₹12,500 more interest. Also explore Senior Citizen Savings Scheme (SCSS) which offers even higher rates (8%+) for 60+ with tax benefits.
Not adding a nominee
Without a nominee, your FD proceeds go through legal succession which can take 6-12 months. Add a nominee when opening the FD or update it later at your branch. Nomination overrides even a will for faster claim settlement by family.
Choosing a very long tenure in a falling rate environment
If interest rates are expected to fall, lock in for 5-10 years. But if rates are low and expected to rise (like post-2020), use shorter tenures (1-3 years) or laddering (split ₹10L into five ₹2L FDs maturing each year). This gives reinvestment opportunities without premature withdrawal penalties.
Updated: October 2026
Source: Reserve Bank of India (RBI) and major bank websites
Example rates: As of October 2026, general public rates range from 6.5-7.5%, senior citizens 7-8% for 3-5 year tenures at major banks. Rates vary significantly by bank, tenure, and deposit amount. Always check current rates on your bank's website or RBI's database before investing.
Note: FD rates change frequently. This calculator is for estimation only.
What is a Fixed Deposit?
A Fixed Deposit (FD) is a savings instrument offered by banks and NBFCs in India where you invest a lump sum for a fixed tenure at a predetermined interest rate. Most Indian banks compound interest quarterly on cumulative FDs.
FD Formula Explained
Cumulative FD (Compound Interest):
A = P × (1 + r/n)^(n × t)Where:
- A = Maturity amount
- P = Principal amount
- r = Annual interest rate (as decimal, e.g., 7% = 0.07)
- n = Compounding frequency per year (12 = monthly, 4 = quarterly, 2 = half-yearly, 1 = yearly)
- t = Tenure in years
Non-Cumulative FD (Simple Interest):
A = P × (1 + r × t)This is used when interest is paid out periodically (monthly/quarterly/yearly) and not reinvested. The total interest is P × r × t.
Quarterly compounding (n=4) is the standard for most Indian bank FDs. It offers better returns than yearly compounding - on ₹1L at 7% for 5 years, quarterly gives ₹41,478 interest vs ₹40,255 with yearly compounding.
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Frequently Asked Questions
What is an FD Calculator?
An FD (Fixed Deposit) Calculator estimates the maturity value of a bank or NBFC fixed deposit. Enter the principal, interest rate, tenure, and compounding frequency to see interest earned and the final amount.
How do Indian banks usually compound FD interest?
Most Indian banks compound interest quarterly on cumulative FDs. This calculator defaults to quarterly compounding and also supports monthly, half-yearly, and yearly compounding, plus simple interest (non-cumulative).
What is the difference between cumulative and simple interest FD?
A cumulative FD reinvests interest so you receive a higher maturity amount at the end. Simple interest (non-cumulative) pays interest periodically (monthly/quarterly/yearly) without compounding. Cumulative FDs generally earn more over the same tenure.
Is FD interest taxable in India?
Yes, FD interest is fully taxable as per your income tax slab. Banks deduct 10% TDS if total interest income exceeds ₹40,000/year (₹50,000 for senior citizens). Submit Form 15G/15H if you have no tax liability. This calculator shows gross maturity before tax.
What are typical FD interest rates in India?
As of October 2026, general public FD rates range from 6.5-7.5% p.a. for 3-5 year tenures. Senior citizens get 0.25-0.5% higher rates (7-8%). Small finance banks may offer 0.5-1% more than large banks. Rates vary by bank, tenure, and deposit amount. Always check current rates before investing.
Can I break my FD before maturity?
Yes, but premature withdrawal attracts a penalty of 0.5-1% on the interest rate. You only get interest for the actual tenure held at the lower rate. For example, breaking a 5-year 7% FD after 2 years might give you 5.5% for 2 years instead of 6% for 2 years. Plan your liquidity needs carefully.
Should I choose quarterly or monthly compounding?
More frequent compounding gives slightly higher returns. On ₹1 lakh at 7% for 5 years: quarterly compounding gives ₹41,478 interest vs ₹41,918 with monthly compounding - a difference of ₹440. Most banks default to quarterly compounding. If offered, choose monthly for marginally better returns.
Is my FD deposit safe?
FDs with scheduled banks are insured up to ₹5 lakh per depositor per bank by DICGC (Deposit Insurance and Credit Guarantee Corporation). If the bank fails, you get up to ₹5L back. For amounts above ₹5L, consider splitting across multiple banks or choosing highly-rated banks and NBFCs.