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Fixed Deposit Calculator
🏛 Fixed Deposit Calculator
Find out exactly how much a Fixed Deposit will be worth at maturity, based on your principal, interest rate, tenure, and how often the bank compounds interest.
The compounding formula
A = P × (1 + r/n)^(n×t)
P = Principal r = Annual rate (decimal) n = Compounding periods/yr t = Years
Most Indian banks compound FD interest quarterly by default, which is why the "effective annual rate" on your FD is always slightly higher than the quoted nominal rate — quarterly compounding lets each quarter's interest start earning interest of its own a quarter early, compared to annual compounding.
Why compounding frequency matters
On paper, a 7.1% FD compounded quarterly behaves like roughly 7.29% compounded annually — small in any single year, but the gap widens the longer the money sits. If a bank offers nearly identical rates with different compounding frequencies, the more frequent option is mathematically better, all else equal. Note also that FD interest is taxable as per your income slab in India, and TDS typically applies once annual interest crosses ₹40,000 (₹50,000 for senior citizens) from a single bank.
Frequently Asked Questions
Is FD interest taxable?
Yes. FD interest is added to your total income and taxed at your applicable income-tax slab rate — it is not tax-free. Banks deduct TDS once interest from them in a financial year crosses the threshold, but you're still liable to declare and pay tax on the full amount.
What happens if I withdraw an FD early?
Most banks charge a penalty (commonly 0.5%–1% reduction in the interest rate) for premature withdrawal, and you only earn interest for the period the deposit actually ran, calculated at the lower applicable rate.
Cumulative vs non-cumulative FD — what's the difference?
A cumulative FD reinvests interest and pays everything out at maturity (what this calculator models). A non-cumulative FD pays out interest periodically — monthly, quarterly, or annually — as income, with no compounding on that paid-out portion.
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