FD Calculator

How to use this calculator

1. Enter the deposit amount and the rate the bank quoted.
2. Enter the tenure.
3. Leave compounding on quarterly unless your bank says otherwise — it is the Indian standard.
4. Set senior citizen to add the usual 0.50% bonus.

How the calculation works

M = P × (1 + r/n)^(n×t)

• P — the principal
• r — the annual rate as a decimal
• n — compounding periods per year
• t — the tenure in years

The detail that matters: Indian banks compound FDs quarterly, not annually, unless you choose a periodic payout instead of reinvestment. Calculators that assume annual compounding understate every Indian FD.

A worked example

₹5,00,000 at 7% for 5 years, compounded quarterly.

The quarterly rate is 7 ÷ 4 = 1.75%, over 20 quarters:

M = 5,00,000 × (1.0175)^20
M = 5,00,000 × 1.414778
M = 7,07,389

Maturity value	₹7,07,389
Interest earned	₹2,07,389
Effective annual yield	7.19%

Why the compounding frequency matters

The same deposit with annual compounding matures at ₹7,01,276 — a difference of ₹6,113, or nearly 3% of the interest earned, purely from the compounding convention.

Compounding	Maturity	Interest
Annual	₹7,01,276	₹2,01,276
Quarterly	₹7,07,389	₹2,07,389

Effective yield is the number to compare

A 7% rate compounded quarterly produces the same result as 7.19% compounded annually. That is the effective annual yield, and it is the figure to use when comparing across products.

It has a practical consequence: a 7.1% rate compounded annually is worse than a 7% rate compounded quarterly. Comparing headline rates alone will occasionally point you at the worse deal.

Tax — the part that changes the real return

FD interest is fully taxable at your slab rate, and it is taxable as it accrues each year, not only at maturity. This surprises people who assume a five-year FD is taxed once at the end.

TDS applies once interest exceeds ₹40,000 in a year (₹50,000 for senior citizens). The bank deducts 10% — but TDS is not the final liability. In the 30% slab you owe the remaining 20% when filing.

For someone in the 30% bracket, a 7% FD returns about 4.9% after tax. Against 6% inflation, that is a small real loss. FDs preserve capital and provide certainty; they do not build wealth.

Submit Form 15G (or 15H if a senior citizen) if your total income is below the taxable limit, and the bank will not deduct TDS at all.

Breaking an FD early

You get the rate applicable to the period the deposit actually ran, not the rate you booked, and most banks then deduct a penalty of 0.5 to 1 percentage point on top.

Breaking a five-year FD after one year can leave you with less than a savings account would have paid. Laddering — several smaller FDs maturing at different times — avoids having to break a large one for a small need.

Common mistakes to avoid

Assuming annual compounding. As above, worth thousands of rupees on a moderate deposit.

Ignoring the DICGC limit. Deposits are insured to ₹5,00,000 per depositor per bank, covering principal and interest combined. That is per bank, not per account, so spreading larger sums genuinely increases protection. Small finance banks offer higher rates precisely because they carry more risk.

Choosing a tax-saving FD under the new regime. A five-year tax-saving FD qualifies for 80C but locks the money completely — no premature withdrawal, no loan against it — and the interest stays fully taxable. Under the new regime the 80C deduction is unavailable, which removes the only reason to accept the lock-in.

Comparing FD returns against equity. They answer different questions. An FD is for money you will need on a known date, or for capital you cannot afford to see fall. It is not competing with a fifteen-year SIP and should not be judged against one.

Forgetting to instruct maturity. Many FDs auto-renew at whatever rate prevails on the maturity date, which may be well below what you could get elsewhere. Set a reminder.

When this calculator is not the right tool

For depositing monthly rather than in one lump sum, use the RD calculator — the maths is genuinely different and the return is much lower. For a tax-free long-term alternative, compare against PPF. And for anything with market risk and a horizon over five years, the SIP calculator is the relevant comparison.