FD Calculator
Calculate Fixed Deposit maturity amount, total interest, and effective yield for any compounding frequency.
FD Details
Principal Amount
Annual Interest Rate
Investment Period
Interest Type
Compounding Frequency
Maturity Summary
Principal
₹1.00 L
Interest Earned
₹21,341
Maturity Amount
₹1.21 L
Eff. Annual Yield
7.11%
Growth Chart
Year-by-Year Breakdown
| Period | Principal | Interest Earned | Maturity Value |
|---|---|---|---|
| Year 1 | ₹1,00,000 | ₹6,660 | ₹1,06,660 |
| Year 2 | ₹1,00,000 | ₹13,764 | ₹1,13,764 |
| Year 3 | ₹1,00,000 | ₹21,341 | ₹1,21,341 |
What is a Fixed Deposit?
A Fixed Deposit (FD) is a financial instrument offered by banks and NBFCs where you deposit a lump sum for a fixed tenure at a predetermined interest rate. Unlike savings accounts, FDs offer higher, guaranteed returns and full capital protection — making them one of the safest investment options in India. Your return is locked in at booking, so market movements never affect your maturity amount.
Compound vs Simple Interest
Compound interest adds earned interest back to the principal at each compounding period, so the next period's interest is calculated on a larger base. Simple interest always calculates on the original principal alone. Over a 5-year term at 7%, compound interest on ₹1 Lakh gives ₹1,41,478 (quarterly), while simple interest gives only ₹1,35,000 — a difference of ₹6,478 that grows with tenure and rate.
Choosing the Right FD Tenure
Banks typically offer higher interest rates for 1–3 year tenures compared to very short or very long deposits. Senior citizens receive an additional 0.25–0.50% benefit. Special promotional tenures — like 400, 444, or 555 days — often carry higher rates. Laddering FDs across different maturities (1-year, 2-year, 3-year) balances liquidity needs with maximising returns.
Tax on FD Interest
FD interest is taxable as "Income from Other Sources" at your slab rate. Banks deduct TDS at 10% when annual interest exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G (below 60 years) or 15H (senior citizen) if your total income is below the taxable limit to prevent TDS deduction. Always declare FD interest in your ITR regardless of TDS status.
DICGC Insurance on Bank FDs
DICGC (Deposit Insurance and Credit Guarantee Corporation) insures all bank deposits — savings, current, FD, and RD — up to ₹5 Lakhs per depositor per bank, covering both principal and interest. This insurance does not cover cooperative banks registered only under State Acts. To protect sums above ₹5 Lakhs, distribute deposits across multiple scheduled commercial banks.
Loan Against FD
You can avail an overdraft or loan against your FD — typically up to 90% of the FD value — at just 1–2% above your FD interest rate. This is one of the cheapest credit options in India. Your FD continues to earn interest, and you only pay interest on the amount actually drawn. This makes loan-against-FD far cheaper than personal loans (10–18%) or credit card debt (30–42%).
Premature Withdrawal
Most banks allow premature FD withdrawal with a penalty of 0.5–1% below the applicable rate for the tenure held. For example, breaking a 3-year FD (7%) after 1 year (1-year rate: 6.5%) may yield 5.5–6%. Flexi FDs auto-sweep surplus savings into FDs and break only the exact amount needed, preserving the rest at the original rate and avoiding full premature withdrawal penalties.
FD vs PPF vs Debt Mutual Funds
FDs offer guaranteed returns and are ideal for short-to-medium term goals (1–5 years). PPF (7.1%, tax-free under EEE status, 80C deduction) beats FDs on post-tax returns for taxpayers in the 20–30% bracket. Debt mutual funds carry credit and interest-rate risk but offer better liquidity and potentially higher post-tax returns over 3+ years. The right choice depends on your tax bracket, tenure, and liquidity needs.
Frequently Asked Questions
Which is better — monthly or quarterly FD compounding?
Monthly compounding yields slightly more than quarterly because interest is reinvested more frequently. On ₹1 Lakh at 7% for 5 years: monthly = ₹1,41,763 vs quarterly = ₹1,41,478 — a difference of ₹285. The practical gap is small, so choose based on the FD product your bank offers rather than optimising compounding frequency alone.
What is the difference between cumulative and non-cumulative FDs?
A cumulative FD reinvests interest and pays the full maturity amount (principal + all interest) at the end — ideal for wealth accumulation. A non-cumulative FD pays interest periodically (monthly/quarterly/yearly) as a regular income stream — suited for retirees. The maturity value of a cumulative FD is always higher due to the compounding effect.
Can I open a joint FD account?
Yes. Joint FDs operate under "Either or Survivor" (either holder can transact) or "Former or Survivor" (only primary holder can transact during lifetime) modes. Interest income is typically attributed to the primary holder for TDS purposes. Each holder can claim their proportionate share while filing ITR.
How does auto-renewal work in FDs?
If you select auto-renewal at the time of booking, the FD automatically renews on maturity for the same tenure at the interest rate prevailing on that date — not the original booking rate. Review auto-renewal settings periodically, especially in a falling-rate environment, as you might want to redeploy funds into better-yielding instruments.
What is an NBFC FD and is it safe?
Non-Banking Financial Companies (NBFCs) like Bajaj Finance, Shriram Finance, and Mahindra Finance offer FDs at rates 0.5–2% higher than banks. However, NBFC FDs are not covered by DICGC insurance and carry higher credit risk. Only invest in NBFC FDs that have AAA or AA+ credit ratings from CRISIL, ICRA, or CARE to ensure safety.