How is FD interest calculated?

For a cumulative FD, interest is compounded quarterly using A = P × (1 + r/4)^(4t), where P is the principal, r is the annual rate divided by 100, and t is the tenure in years.

Is FD interest taxable in India?

Yes. FD interest is taxable in India and is added to your total income. Banks may deduct TDS when the annual interest crosses the applicable threshold.

Can I break my FD before maturity?

Most banks allow premature withdrawal, but a penalty is usually applied and the interest rate may be adjusted for the period the FD was actually held.

Is my FD deposit safe?

Deposits in scheduled commercial banks are insured by DICGC up to ₹5 lakh per depositor per bank, including principal and interest combined.

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What is a Fixed Deposit (FD)?

A Fixed Deposit (FD) is a financial instrument offered by banks and non-banking financial companies (NBFCs) that provides a higher rate of interest than a regular savings account, for a fixed period of time. You deposit a lump sum amount for a predetermined tenure, and at maturity you receive the principal along with the interest earned.

FDs are one of the safest investment options in India since deposits up to ₹5 lakh per bank are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). The interest is compounded quarterly in most Indian bank FDs, which is what this calculator uses.

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Principal Amount

The lump sum you deposit with the bank. A higher principal directly increases your maturity amount and estimated returns.

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Rate of Interest

The annual interest rate offered by your bank for the chosen tenure. Even a 0.5% difference can meaningfully change your total returns.

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Time Period

The duration for which you lock in your deposit. A longer tenure typically earns a higher rate and significantly increases the power of compounding.

How to Use This FD Calculator

Our FD calculator gives you instant results. Here is how to get your answer in seconds.

Enter the Total Investment

Type the amount you wish to deposit. This is the principal that will earn compound interest over the chosen period.

Set the Rate of Interest

Enter the annual interest rate offered by your bank for the chosen tenure. You can find this on your bank's FD rates page.

Choose the Time Period

Set the deposit duration in years or months using the dropdown. Try different tenures to see how compounding grows your wealth over time.

Read Your Instant Results

The calculator instantly displays your invested amount, estimated returns, and the total maturity value is updated in real time as you adjust any field.

FD Calculation Formula Explained

Most Indian banks compound FD interest quarterly. The standard formula for a cumulative FD (where interest is reinvested) is:

FD Maturity Formula

A = P × (1 + r/n)^n×t

Where

A = Maturity amount (Total value)
P = Principal (Total investment)
r = Annual interest rate ÷ 100
n = Compounding frequency per year = 4 (quarterly)
t = Tenure in years

Example calculation

Investment = ₹1,00,000 | Rate = 6.5% p.a. | Tenure = 5 years
r = 6.5 ÷ 100 = 0.065 | n = 4 | t = 5
A = 1,00,000 × (1 + 0.065/4)^4×5
A = 1,00,000 × (1.01625)²⁰
A ≈ ₹1,38,041
Est. returns = ₹1,38,041 − ₹1,00,000 = ₹38,041

Factors That Affect Your FD Returns

Your FD maturity amount is determined by three core variables. Adjusting any one of them changes the overall return on your deposit.

Principal Amount

The larger the deposit, the higher the absolute returns. A ₹5 lakh FD at 7% for 5 years yields about ₹2.06 lakh in interest, while a ₹10 lakh FD under the same terms yields ₹4.11 lakh, a proportional increase.

Rate of Interest

Higher rates mean significantly better returns, especially over longer tenures. Senior citizens typically receive an additional 0.25–0.50% p.a. over the standard rate. Always compare rates across banks before booking.

Tenure

Compounding makes longer tenures disproportionately rewarding. The interest earned in later years is much higher because it is calculated on a growing base. Short-changing your tenure means leaving compounding gains on the table.

Indicative FD Interest Rates by Bank Type

FD rates vary by bank, tenure, and depositor category. The table below shows typical ranges as of 2026, always verify the current rate with your bank before booking.

Bank Type	Typical Rate Range (General)	Senior Citizen Premium
Public Sector Banks	6.50% – 7.25% p.a.	+0.50% p.a.
Private Sector Banks	6.75% – 7.75% p.a.	+0.25–0.50% p.a.
Small Finance Banks	7.50% – 9.00% p.a.	+0.50% p.a.
NBFCs	7.75% – 9.50% p.a.	+0.25–0.50% p.a.
Post Office TD	6.90% – 7.50% p.a.	No extra premium

* Rates are indicative and change frequently. DICGC insurance covers deposits up to ₹5 lakh per depositor per bank. Always check with your bank or NBFC for the exact applicable rate before booking.

Cumulative vs. Non-Cumulative FD
Which Should You Choose?

When booking an FD, one of the key decisions is whether to opt for a cumulative or non-cumulative payout structure.

Cumulative FD

Interest is compounded and reinvested each quarter. You receive the principal plus all accumulated interest only at maturity. This calculator uses the cumulative method.

Best for: wealth creation, long-term savings goals.

Non-Cumulative FD

Interest is paid out at regular intervals, monthly, quarterly, half-yearly, or annually, rather than being reinvested. The payout is slightly lower than cumulative because compounding is not applied.

Best for: retirees or anyone needing regular income.

Frequently Asked Questions

For a cumulative FD (the most common type), interest is compounded quarterly using the formula: A = P × (1 + r/4)^4t, where P is the principal, r is the annual rate divided by 100, and t is the tenure in years. The estimated returns equal A − P. For a non-cumulative FD, interest is calculated on the principal using simple interest: Interest = P × r × t, and paid out periodically.

Yes. FD interest is fully taxable in India and is added to your total income and taxed at your applicable slab rate. Banks deduct TDS (Tax Deducted at Source) at 10% if the total interest earned from a bank in a financial year exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable threshold, you can submit Form 15G (or 15H for senior citizens) to the bank to avoid TDS deduction.

Yes, most banks allow premature withdrawal of FDs. However, a premature withdrawal penalty, typically 0.5% to 1% of the interest rate, is applied. This means you receive interest at the rate applicable for the period the deposit was actually held, minus the penalty. Some tax-saving FDs (with a 5-year lock-in) do not permit premature withdrawal. Check your bank's terms before booking if you may need liquidity.

A tax-saving FD is a special fixed deposit with a mandatory 5-year lock-in period. Investments up to ₹1.5 lakh per year qualify for a deduction under Section 80C of the Income Tax Act. However, the interest earned is still fully taxable. Premature withdrawal is not permitted, and joint accounts are not eligible for the 80C benefit (only the first holder's investment qualifies).

On maturity, your bank will typically credit the maturity amount (principal + interest) to your linked savings account. If you have not given instructions, many banks auto-renew the FD for the same tenure at the prevailing interest rate on the maturity date. To avoid an unwanted renewal at a potentially lower rate, set a reminder and provide renewal or redemption instructions before maturity.

Deposits in scheduled commercial banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor per bank (covering both principal and interest combined). If you have more than ₹5 lakh to invest, spread it across multiple banks to stay within the insurance limit at each. NBFC deposits are not covered by DICGC insurance, so evaluate the NBFC's credit rating before investing.

More frequent compounding means interest is calculated on a growing base more often, resulting in slightly higher effective returns. Indian banks typically compound quarterly (4 times a year). Monthly compounding would yield marginally more than quarterly compounding at the same nominal rate. This calculator uses quarterly compounding, which is the RBI-standard for Indian bank FDs.

Yes. This calculator uses the standard quarterly compounding formula used by most scheduled banks in India. The results will closely match your bank's FD maturity statement for the same principal, rate, and tenure. Note that the actual amount may differ marginally due to rounding conventions used by individual banks, and TDS deductions are not factored in here. Always refer to your bank's FD receipt for the precise maturity figures.

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Free FD Calculator Calculate Your Fixed Deposit Returns Instantly

What is a Fixed Deposit (FD)?

Principal Amount

Rate of Interest

Time Period

How to Use This FD Calculator

FD Calculation Formula Explained

FD Maturity Formula

Where

Example calculation

Factors That Affect Your FD Returns

Principal Amount

Rate of Interest

Tenure

Indicative FD Interest Rates by Bank Type

Cumulative vs. Non-Cumulative FD Which Should You Choose?

Cumulative FD

Non-Cumulative FD

Frequently Asked Questions

How is FD interest calculated?

Is FD interest taxable in India?

Can I break my FD before maturity?

What is a tax-saving FD?

What happens to my FD on maturity?

Is my FD deposit safe?

How does compounding frequency affect my FD returns?

Is the FD maturity amount shown by this calculator accurate?

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Free FD Calculator
Calculate Your Fixed Deposit Returns Instantly

Cumulative vs. Non-Cumulative FD
Which Should You Choose?