FD (Fixed Deposit) Calculator

FD interest is calculated using the compound interest formula: A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the tenure in years. Most banks compound quarterly, though some offer monthly compounding. The compounding frequency affects the effective return.

With simple interest, you earn interest only on the original principal. With compound interest, you earn interest on both the principal and previously accumulated interest. Most cumulative FDs use compound interest (typically quarterly), which results in higher effective returns. Non-cumulative FDs that pay out interest periodically effectively use simple interest.

Yes. Most banks offer an additional 0.25% to 0.75% (typically 0.50%) higher interest rate for senior citizens aged 60 and above. Some banks offer even higher premiums for super senior citizens aged 80+. This calculator adds the senior citizen bonus to the base rate when the toggle is enabled.

Banks deduct TDS at 10% if your annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). However, your actual tax depends on your income tax slab. FD interest is added to your taxable income and taxed at your applicable slab rate. You can set your tax bracket in this calculator to see the post-tax return. Submit Form 15G/15H to avoid TDS if your income is below the taxable limit.

A tax-saving FD has a lock-in period of 5 years and qualifies for deduction under Section 80C up to ₹1,50,000. However, the interest earned is still fully taxable. Tax-saving FDs typically offer the same rate as regular 5-year FDs. Premature withdrawal is not allowed for tax-saving FDs.

If you withdraw your FD before maturity, banks typically impose a penalty of 0.5% to 1.0% on the applicable interest rate. For example, if your FD rate is 7% and the penalty is 1%, you earn interest at 6% for the period you held the deposit. The penalty varies by bank and tenure. Tax-saving FDs do not allow premature withdrawal.

FD laddering means splitting your total investment across multiple FDs with different maturities. For example, instead of putting ₹5L in one 5-year FD, you can invest ₹1L each in 1-year, 2-year, 3-year, 4-year, and 5-year FDs. This provides regular liquidity, reduces reinvestment risk, and lets you take advantage of rate changes without breaking long-term deposits.

If your FD earns 7% and inflation is 6%, your real return is only about 1%. After accounting for tax, real returns can even turn negative. This is why financial planners suggest using FDs for capital safety and short-term goals, while using equity-linked instruments for long-term wealth creation. This calculator shows inflation-adjusted returns when enabled.

FD returns are guaranteed by the bank for the committed tenure and rate, unlike market-linked instruments. However, the rates shown in this calculator are illustrative. Actual rates depend on the bank, tenure, deposit amount, and whether you qualify as a senior citizen. Always verify the current rate with your bank before investing.