Mera Hisab
What is a fixed deposit?
A fixed deposit (FD) lets you keep a lump sum with a bank, small finance bank or post office for a fixed period at a fixed interest rate. The rate is locked in on the day you open the FD, so your maturity amount is known in advance. This calculator assumes a cumulative FD, where interest is added to the deposit and paid out together at maturity.
How is FD interest calculated?
Banks use compound interest:
A = P × (1 + r ÷ n)n × t
- A = maturity amount
- P = amount deposited
- r = annual interest rate ÷ 100
- n = number of times interest is added per year (4 for quarterly)
- t = tenure in years
Most Indian banks add interest quarterly. For very short deposits (usually under six months) many banks pay simple interest instead, so their figure may be slightly lower than this estimate.
Examples: ₹1 lakh and ₹5 lakh FDs
At 7% a year, compounded quarterly:
| Deposit | Tenure | Maturity amount | Interest earned |
|---|---|---|---|
| ₹1 lakh | 1 year | ₹1,07,186 | ₹7,186 |
| ₹1 lakh | 3 years | ₹1,23,144 | ₹23,144 |
| ₹1 lakh | 5 years | ₹1,41,478 | ₹41,478 |
| ₹5 lakh | 5 years | ₹7,07,389 | ₹2,07,389 |
Does the compounding frequency matter?
For ₹1 lakh at 7% for 5 years:
| Compounding | Maturity amount |
|---|---|
| Monthly | ₹1,41,763 |
| Quarterly | ₹1,41,478 |
| Half-yearly | ₹1,41,060 |
| Yearly | ₹1,40,255 |
More frequent compounding earns a little more, but the interest rate and tenure matter far more. The "effective annual yield" in the result shows the true yearly return after compounding.
Tax on FD interest
FD interest is added to your income and taxed at your income-tax slab rate. Banks deduct TDS when your interest from one bank in a financial year crosses the threshold (₹50,000, or ₹1 lakh for senior citizens, under current rules). If your total income is below the taxable limit, you can submit Form 121 to the bank to avoid TDS (from April 2026 it replaced Forms 15G and 15H).
Tips
- Compare rates. Senior citizens usually get 0.25–0.50% extra, and small finance banks often pay more than large banks.
- Split large amounts. Several smaller FDs with different maturity dates (an "FD ladder") give you access to money without breaking one big FD.
- Know the safety limit. Deposits in each bank are insured by DICGC up to ₹5 lakh per depositor, including interest.
- Avoid breaking FDs early. Premature withdrawal usually means a penalty of 0.5–1% on the rate.
Frequently asked questions
What is the difference between a cumulative and a non-cumulative FD?
In a cumulative FD, interest is added to the deposit and you get everything at maturity, so it earns interest on interest. In a non-cumulative FD, interest is paid to you monthly or quarterly, so the maturity amount is just your original deposit. This calculator shows the cumulative amount.
Is FD interest taxable?
Yes. FD interest is taxed at your income-tax slab rate every year, even in a cumulative FD where you receive it only at maturity. Banks may also deduct TDS.
How safe is my money in an FD?
Deposits in banks regulated by the RBI are insured by DICGC up to ₹5 lakh per depositor per bank, covering both principal and interest.
Can I close my FD before maturity?
Most FDs can be closed early, but the bank usually pays a lower rate plus a penalty of 0.5–1%. Tax-saver FDs have a 5-year lock-in and cannot be closed early.
Is the information I enter saved anywhere?
No. The calculation happens entirely in your browser. Nothing you enter is sent to our server or stored.