FD Calculator — Fixed Deposit Maturity Value & Interest
📜 FD methodology & RBI note
Maturity uses quarterly compounding, the convention for Indian bank FDs. Rates vary by bank and tenure; deposits up to ₹5 lakh per bank are insured by DICGC (an RBI subsidiary). TDS applies on interest above ₹40,000/year (₹50,000 for seniors). Last verified: June 2026.
How does quarterly compounding boost FD returns?
Indian banks credit FD interest quarterly into the deposit itself (for cumulative FDs). Each quarter’s interest then earns interest — turning a nominal 7% into an effective annual yield of 7.19%. Over long tenures the gap widens substantially. Pairs well with the RD Calculator and the Simple Interest Calculator.
| Tenure | ₹5 lakh @ 7% (Simple) | ₹5 lakh @ 7% (Quarterly Compound) | Compounding Gain |
|---|---|---|---|
| 1 year | ₹5,35,000 | ₹5,35,930 | ₹930 |
| 3 years | ₹6,05,000 | ₹6,15,717 | ₹10,717 |
| 5 years | ₹6,75,000 | ₹7,07,389 | ₹32,389 |
| 10 years | ₹8,50,000 | ₹10,00,798 | ₹1,50,798 |
What are current FD rates in India?
| Bank Type | 1-year | 3-year | 5-year | Senior Citizen Bonus |
|---|---|---|---|---|
| Large private banks | 6.5–7.0% | 6.75–7.1% | 6.8–7.1% | +0.50% |
| PSU banks | 6.5–6.9% | 6.5–7.0% | 6.5–6.8% | +0.50% |
| Small finance banks | 7.5–8.25% | 7.75–8.5% | 7.5–8.25% | +0.50–0.75% |
| Corporate FDs (AAA) | 7.5–8.1% | 7.8–8.4% | 7.9–8.4% | +0.25% |
Indicative for FY 2025-26 — always verify live rates on the bank’s website. Small finance bank FDs carry the same ₹5 lakh DICGC cover as large banks.
What is FD laddering and why use it?
Instead of locking ₹5 lakh in one 5-year FD, split it into five ₹1 lakh FDs maturing in 1, 2, 3, 4, and 5 years. Each year an FD matures — reinvest it for 5 years at the prevailing rate. After the ladder builds, you get yearly liquidity, average out rate cycles, and never face a full premature-withdrawal penalty.
Should you choose a tax-saver FD?
The 5-year tax-saver FD qualifies for Section 80C deduction (old regime only) but locks your money completely — no premature withdrawal, no loan against it. Interest remains fully taxable. If you do not need the 80C benefit, a regular FD of the same tenure offers identical returns with flexibility.
How does TDS on FD interest actually work?
Banks deduct 10% TDS when your interest across all FDs in that bank crosses ₹50,000 in a financial year (₹1 lakh for senior citizens, FY 2025-26 thresholds). Two critical nuances: TDS is not the final tax — if you are in the 30% slab you owe the difference at filing; and if your total income is below the basic exemption, submit Form 15G (15H for seniors) at the start of each year to stop the deduction entirely. PAN not provided? TDS jumps to 20%.
How is FD interest reported in your ITR?
Interest accrues yearly even on cumulative FDs that pay at maturity. The cleaner method is accrual-basis reporting: declare each year’s accrued interest annually (it appears in your AIS/Form 26AS), avoiding a large taxable lump in the maturity year that could push you into a higher slab.
What special FD types should you know?
Senior Citizen Savings Scheme (SCSS): not technically an FD, but the 8.2% government rate beats most bank FDs for those 60+, with ₹30 lakh limit and quarterly payouts. Sweep-in FDs: link to your savings account — surplus auto-converts to FD, and shortfalls auto-break units, keeping liquidity without rate loss. NRE FDs: for NRIs, interest is fully tax-free in India and principal is repatriable. Floating-rate FDs: linked to repo rate, useful when rates are expected to rise.
When does breaking an FD make sense?
The penalty is typically 0.5–1% on the rate for the period the deposit ran. The break-even logic: if a new FD rate exceeds your old rate by more than the penalty plus the rate differential for the remaining tenure, switching wins. Example: 2 years into a 5-year FD at 6.5% with a 1% penalty, switching to a new 8% FD usually recovers the penalty within months. Run both scenarios in this calculator before deciding.
Worked example: the full lifecycle of a ₹10 lakh FD
Suresh, 30% slab, opens a ₹10 lakh cumulative FD at 7.25% for 5 years (quarterly compounding). Maturity value: ₹10,00,000 × (1 + 0.0725/4)^20 = ₹14,32,696. Interest: ₹4,32,696 (≈ ₹86,539/year accrued). Each year the bank deducts 10% TDS (~₹8,654) since interest exceeds ₹50,000; Suresh owes another ~20% + cess at filing — total tax ≈ ₹1,35,000 over the tenure, netting ≈ ₹12,97,700. Effective post-tax CAGR: ≈ 5.34%. The same exercise at the 5% slab nets ≈ 6.78% — slab position, not the headline rate, decides whether an FD beats inflation.
Senior citizen FDs: the genuinely better deal
At 60+, three boosts stack: +0.50% standard rate bonus (some banks +0.75% on special tenures), the ₹1 lakh TDS threshold (FY 2025-26), and the Section 80TTB deduction of ₹50,000 on deposit interest (old regime). A senior at the 5% slab on a 8% senior FD nets ~7.5% post-tax — competitive with debt funds at zero risk. Pair with SCSS (8.2%, ₹30 lakh cap) before regular FDs: SCSS first, bank senior FDs for the overflow, laddered for liquidity.
FD vs everything: a one-table reality check
| Need | FD’s fit | Better alternative if any |
|---|---|---|
| Capital certainty | Perfect | — |
| Beat inflation post-tax (30% slab) | Usually fails | Equity for 5+ yr money |
| Regular income at 60+ | Good | SCSS first (8.2%) |
| Emergency access | Good with sweep-in | Liquid fund comparable |
| 80C deduction | Only 5-yr tax-saver | PPF (tax-free interest too) |
| NRI parking | NRE FD excellent (tax-free) | — |
The FD is a tool for certainty and timing, not wealth creation. Used for the right bucket — emergency funds, near-term goals, retiree income floors — it is unbeatable; used as the entire portfolio, it quietly loses to inflation after tax.
Frequently asked questions
How is FD interest calculated in India?
Indian banks use quarterly compounding for cumulative FDs: M = P × (1 + r/4)^(4t). A 7% FD effectively yields 7.19% annually because each quarter's interest earns interest in subsequent quarters.
Is FD interest taxable?
Yes, fully taxable at your income slab rate as Income from Other Sources. Banks deduct 10% TDS when annual interest exceeds ₹50,000 (₹1 lakh for senior citizens under the FY 2025-26 limits). Submit Form 15G/15H to avoid TDS if your total income is below the taxable threshold.
What is the difference between cumulative and non-cumulative FD?
Cumulative FDs reinvest interest and pay everything at maturity — higher effective returns. Non-cumulative FDs pay interest monthly/quarterly to your account — useful for regular income (retirees) but with simple-interest-like outcomes.
Can I break an FD before maturity?
Yes, with a penalty — typically 0.5–1% reduction on the applicable rate for the period the deposit actually ran. Some banks offer sweep-in FDs or partial withdrawal facilities that limit the damage.
Are FDs safe? What is DICGC insurance?
Bank FDs are insured by DICGC up to ₹5 lakh per depositor per bank (principal + interest combined). For larger amounts, split deposits across banks to keep each within the insured limit.
Which is better: FD or debt mutual fund?
FDs offer guaranteed returns and DICGC cover; debt funds offer flexibility but are now taxed at slab rates after the 2023 changes, removing their LTCG advantage. FDs win for certainty; debt funds for liquidity.
Can I get monthly income from an FD?
Yes — choose a non-cumulative FD with monthly payout. The bank pays interest (at a slightly discounted rate versus quarterly compounding) into your savings account each month. A ₹10 lakh FD at 7.2% monthly-payout yields roughly ₹5,900/month. Retirees often ladder several payout FDs with staggered dates for steady cash flow.
What is a corporate FD and is it safe?
Company FDs from NBFCs and corporates pay 0.75–1.5% above bank rates but carry credit risk and no DICGC cover. Stick to AAA-rated issuers, keep allocations small, and check the rating quarterly — downgrades precede defaults. They suit the yield-enhancement sleeve, never the safety bucket.
Related calculators
📋 Financial disclaimer: This calculator provides estimates based on published rates and rules and is not investment, tax, or legal advice. Rates change by government/regulator notification and outcomes depend on your circumstances — consult a SEBI-registered advisor or chartered accountant for personal decisions. See methodology.
Sources & References
- RBI — Term Deposit Rates Database — Quarterly compounding convention; current rates published by DBIE
- DICGC — Deposit Insurance — Up to ₹5 lakh per depositor insured by RBI subsidiary DICGC