How the FD calculator works
A fixed deposit (FD) locks a sum of money with a bank or NBFC for a fixed period at a fixed interest rate. In a cumulative FD, the interest is not paid out but added back to the deposit, so it compounds. Most Indian banks compound FD interest quarterly, which is the default here. This calculator works out the maturity amount, the total interest earned and the effective yearly yield, and shows how the balance grows each year.
The FD formula in plain words
Maturity amount = P × (1 + r ÷ n)n × t
P is the deposit, r the yearly interest rate as a decimal (7% is 0.07), n the number of compounding periods a year (4 for quarterly) and t the tenure in years. For very short deposits, many banks pay simple interest at maturity instead, which you can choose in the compounding menu.
Worked example
You deposit ₹1,00,000 for 5 years at 7% a year, compounded quarterly.
- Maturity amount: 1,00,000 × (1 + 0.07 ÷ 4)20 = ₹1,41,478
- Interest earned: ₹41,478
- Effective yearly yield: 7.19%, slightly more than 7% because of quarterly compounding
With simple interest the same deposit would earn only ₹35,000, so compounding adds about ₹6,478.
Things to know before you book an FD
- Senior citizens usually get about 0.25% to 0.50% extra. Add it to the rate to see the difference.
- Tax: FD interest is added to your income and taxed at your slab rate. Banks deduct TDS once yearly interest crosses a threshold (₹50,000 for most depositors and ₹1,00,000 for senior citizens as of FY 2025-26); submit Form 15G or 15H if you qualify.
- Deposit insurance: DICGC insures up to ₹5 lakh per depositor per bank, covering principal and interest together.
- Premature withdrawal usually carries a penalty of around 0.5% to 1% on the rate.
- Ladder your deposits across different maturities to keep some money available while earning longer-term rates.
Bank rates change often. Use the rate your bank currently offers for your exact tenure.
Frequently asked questions
How is FD maturity calculated?
Maturity = P × (1 + r/n)^(n × t), where P is the deposit, r is the yearly rate as a decimal, n is how many times interest is compounded each year and t is the tenure in years. Most Indian banks use quarterly compounding (n = 4).
Is FD interest compounded quarterly?
For cumulative FDs, most Indian banks compound interest quarterly. Some short-term deposits pay simple interest at maturity. Choose the option that matches your bank.
Is FD interest taxable?
Yes. FD interest is added to your total income and taxed at your slab rate. Banks deduct TDS when yearly interest crosses the threshold, and you can claim it back in your return if your tax is lower.
Do senior citizens get higher FD rates?
Most banks offer senior citizens an extra 0.25% to 0.50% a year. Enter the higher rate in the calculator to see the maturity amount.
What is the difference between cumulative and non-cumulative FDs?
In a cumulative FD, interest is reinvested and paid with the principal at maturity, which this calculator shows. A non-cumulative FD pays interest out monthly or quarterly, so it does not compound.