FD Calculator: Fixed Deposit Maturity and Interest
Enter your principal, interest rate, and tenure to see exactly how much your fixed deposit will grow. Choose between a cumulative FD (interest compounded and paid at maturity) or a non-cumulative FD (interest paid monthly, quarterly, half-yearly, or annually). The calculator also shows a year-by-year growth chart and a full compounding schedule so you know what your money is doing at every stage.
What is a fixed deposit and how does it work?
A fixed deposit (FD) is a term deposit product offered by banks, small finance banks, and non-banking financial companies (NBFCs) in India. You lock in a lump sum for a fixed period at a predetermined interest rate. Because the rate and tenure are agreed upfront, you know exactly what you will receive, which makes FDs one of the lowest-risk instruments for capital preservation and predictable income. The bank cannot change your rate after booking, so if rates fall market-wide, your locked-in rate still holds. Premature withdrawal is allowed in most cases but usually attracts a penalty of 0.5-1.0% below the applicable rate.
Cumulative vs non-cumulative FDs: which should you choose?
A cumulative FD reinvests the interest every compounding period so that each successive period earns on a larger base. At maturity you receive principal plus all compounded interest in one lump sum. This is ideal for goals with a defined future date, such as a home down payment, a child's higher education fund, or a retirement corpus. A non-cumulative FD pays interest out at regular intervals (monthly, quarterly, half-yearly, or annually) using simple interest on the original principal, with the principal returned at the end. The payout version is suited to retirees and anyone who needs a regular income stream because the periodic payout supplements living expenses without touching capital. The trade-off is that the total interest earned on a non-cumulative FD is always lower than on a cumulative FD for the same rate and tenure, because compounding never kicks in.
How FD interest is calculated: the formulas explained
Cumulative FDs use the compound interest formula: M = P x (1 + r/n)^(n x t), where P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the tenure in years. Most Indian banks compound quarterly (n = 4), though some compound monthly (n = 12). More frequent compounding gives a higher effective annual yield (EAR = (1 + r/n)^n - 1) than the stated nominal rate. For example, 7% compounded quarterly gives an EAR of about 7.19%, not 7.00%. Non-cumulative FDs use the simple interest formula: SI = (P x r x t) / 100. Here no compounding occurs; each period's interest is calculated on the original principal only, and the total interest is simply the product of principal, rate, and time. The periodic payout is SI divided by the number of payouts over the tenure.
Tax on FD interest and TDS rules in India
FD interest is added to your total income and taxed at your slab rate, regardless of whether you are in the 5%, 20%, or 30% bracket. Banks deduct tax at source (TDS) at 10% when total FD interest from a single bank exceeds INR 40,000 in a financial year (INR 50,000 for senior citizens). If you do not furnish your PAN, TDS rises to 20%. TDS is not the final tax: if your slab is higher, you pay the difference at assessment. If your total income is below the basic exemption limit, submit Form 15G (or 15H for seniors) to the bank at the start of the financial year to avoid any TDS deduction. NBFC deposits have a lower TDS threshold of INR 5,000 per year. Post Office time deposits are also taxable, though the interest qualifies for a deduction under Section 80TTB (up to INR 50,000) for senior citizens.
FD interest rate tiers by bank type (indicative, 2026)
| Bank type | Typical rate range (p.a.) | TDS threshold | Deposit insurance |
|---|---|---|---|
| Large public sector banks (SBI, PNB, BoB) | 6.50% - 7.25% | INR 40,000 / yr | Yes (DICGC, up to INR 5 lakh) |
| Large private banks (HDFC, ICICI, Axis) | 6.75% - 7.40% | INR 40,000 / yr | Yes (DICGC, up to INR 5 lakh) |
| Small finance banks (AU, Equitas, ESAF) | 7.50% - 9.00% | INR 40,000 / yr | Yes (DICGC, up to INR 5 lakh) |
| NBFCs (Bajaj Finance, Shriram) | 7.60% - 8.85% | INR 5,000 / yr | No DICGC cover |
| Post Office Time Deposits | 6.90% - 7.50% | INR 40,000 / yr | Government-backed |
Rates vary by tenure and bank. Check your bank's website for current offers. Senior citizens typically get 0.25-0.50% extra.
Frequently asked questions
What is the minimum deposit for an FD?
Most large banks accept FDs from INR 1,000 to INR 5,000. Some premium FD products or tax-saver FDs (Section 80C) may require a minimum of INR 100. There is generally no upper limit, though amounts above INR 2 crore are classified as "bulk deposits" and may carry a different negotiated rate.
Which compounding frequency gives the highest return?
Monthly compounding gives the highest maturity value because interest is credited and starts earning sooner. Quarterly is the most common for Indian bank FDs. The difference between monthly and quarterly compounding on a 3-year FD at 7% is small (roughly 0.05-0.10% on effective yield) but grows larger on bigger principals and longer tenures.
Can I break an FD before maturity?
Yes. Banks allow premature withdrawal, but they pay the rate applicable for the period the FD actually ran, minus a penalty of 0.5-1.0%. For example, if you booked a 3-year FD at 7% and break it after 1 year, you would typically receive the 1-year rate minus 1%, which might be 5.5% rather than the 6.5% the bank was paying on 1-year FDs at that time. Some tax-saver FDs (5-year lock-in) cannot be broken early at all.
Are FD returns guaranteed?
Bank FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) for up to INR 5 lakh per depositor per bank (across all branches). This covers both principal and interest combined. Amounts above INR 5 lakh are not insured. NBFC FDs are not covered by DICGC, which is why they offer higher rates to compensate for the additional credit risk.
Does a senior citizen rate apply automatically?
No. You must declare your age (usually at the time of booking or by submitting proof of age) so the bank can apply the additional 0.25-0.50% in its system. This calculator adds 0.50% when you toggle the senior citizen option. If your bank offers only 0.25% additional, enter the combined rate manually in the rate field instead.
What is TDS on FD and how do I avoid it?
TDS (Tax Deducted at Source) on FD interest is 10% for PAN-linked accounts when cumulative interest from a bank exceeds INR 40,000 in a financial year (INR 50,000 for seniors). You cannot avoid TDS if your interest crosses these limits and you are taxable. However, if your income is below the basic exemption limit, submit Form 15G (or 15H for seniors) at the start of the financial year and the bank will not deduct TDS. The form must be renewed every year.
How do I calculate the maturity amount of a non-cumulative FD?
For a non-cumulative FD the maturity amount equals the original principal because interest is paid out periodically and does not accumulate. Total interest over the tenure is calculated using simple interest: SI = (P x R x T) / 100, where P is the principal, R is the annual rate, and T is the tenure in years. The periodic payout is this annual interest divided by the number of payouts per year (12 for monthly, 4 for quarterly, 2 for half-yearly, 1 for annually).