FD Calculator

A Fixed Deposit is a financial instrument offered by banks and NBFCs where you deposit a lump sum for a fixed tenure at a predetermined interest rate. Unlike savings accounts, the interest rate is locked in for the entire tenure, making it a safe and predictable investment. At maturity, you receive your principal plus accumulated interest.

FD interest uses compound interest: A = P × (1 + r/n)^(n×t), where P = principal, r = annual rate as decimal, n = compounding periods per year (1=annual, 4=quarterly, 12=monthly), t = time in years. Interest earned = A - P. For non-cumulative FDs, interest is paid out periodically and simple interest applies.

Cumulative FD: Interest is compounded and reinvested. You receive principal + all interest at maturity. Best for wealth building. Non-cumulative FD: Interest is paid out monthly, quarterly, or annually. Principal is returned at maturity. Best for regular income needs like retirees. Our calculator computes cumulative (compound) FD returns.

More frequent compounding means slightly higher effective returns. Example: ₹1,00,000 at 7% for 1 year — Annual compounding: ₹1,07,000. Quarterly compounding: ₹1,07,186. Monthly compounding: ₹1,07,229. The difference grows significantly over longer tenures and larger principals.

Yes. FD interest is fully taxable as 'Income from Other Sources' at your income tax slab rate. TDS (Tax Deducted at Source) is deducted at 10% if annual interest across all FDs in a bank exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G (non-senior) or 15H (senior) to avoid TDS if your total income is below the taxable limit.

FD laddering is a strategy where you split your investment across multiple FDs with different maturities — e.g., ₹1 lakh each in 1-year, 2-year, and 3-year FDs. Benefits: regular liquidity as each FD matures, ability to reinvest at prevailing (possibly higher) rates, and reduced impact if rates change.

Yes. Most banks offer 0.25% to 0.75% extra interest rate on FDs for senior citizens (age 60+). Some banks offer special senior citizen FD schemes with even higher rates. The TDS threshold is also higher at ₹50,000 vs ₹40,000 for regular depositors.

Premature withdrawal is allowed but usually carries a penalty of 0.5% to 1% less than the applicable rate for the actual holding period. Some banks charge a flat penalty. Tax-saving FDs (5-year lock-in under Section 80C) cannot be broken prematurely. Always check the bank's premature withdrawal policy before investing.