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How to use the fd calculator
- 1Enter the amount you plan to deposit and the interest rate the bank quotes.
- 2Set the tenure in years — use 1.5 for eighteen months, and so on.
- 3Leave compounding on quarterly unless your bank's terms say otherwise.
- 4Read the maturity value and total interest; every change recalculates instantly.
How FD interest is actually computed
A fixed deposit is compound interest with the frequency decided by the bank, and in India that frequency is almost always quarterly: the formula is P × (1 + r/4)^(4t). The difference from simple interest grows with tenure — ₹1,00,000 at 7% for five years is ₹35,000 of simple interest but about ₹41,478 with quarterly compounding, because each quarter's interest starts earning its own interest.
This is also why two banks quoting the same rate can show slightly different maturity values: one compounds quarterly, another monthly, a third pays interest out instead of compounding it at all. The compounding selector above reproduces each case. For payout (non-cumulative) FDs, the maturity value is just the principal — the interest arrives in your account each period instead.
The quoted rate is per annum regardless of tenure. A 15-month FD at 7.25% earns 7.25% per year for 1.25 years, not 7.25% in total — a misreading that surfaces surprisingly often when people compare a bank's poster against a calculator.
What the calculator deliberately leaves out
Tax. FD interest is fully taxable at your slab rate, and banks deduct TDS at 10% once interest crosses the annual threshold — which does not settle your liability, it only prepays part of it. If you are in the 30% bracket, a 7% FD yields roughly 4.9% after tax; run the number through the Income Tax Calculator linked below to see the whole picture.
Premature-withdrawal penalties are also out of scope, because every bank sets its own — typically the applicable rate for the period actually held, minus 0.5–1%. If there is a real chance you will break the deposit, laddering several smaller FDs of different tenures beats one large one.
Senior-citizen rates (usually 0.25–0.5% extra) are handled by simply entering the higher rate. Small finance banks often quote 1–2% above the large banks; deposits in scheduled banks are insured by DICGC up to ₹5,00,000 per bank per depositor, which is the number to keep in mind when chasing those rates.
FD against the alternatives
The honest comparison: an FD's return is certain and modest. Against a recurring deposit, the FD wins when you already have the lump sum — every rupee compounds from day one. Against a debt mutual fund, the FD wins on predictability and loses on liquidity and, sometimes, post-tax return. Against equity, there is no comparison to make; they answer different questions.
Where FDs earn their place is money with a date on it — a fee due in eighteen months, an emergency fund, the stable slice of a portfolio. For money without a date and a decade of runway, the Lumpsum Calculator linked below shows what compounding at market rates does to the same principal.
One practical habit: match the tenure to the goal rather than defaulting to one year and rolling over. Auto-renewal at whatever rate prevails on the renewal date is how deposits quietly drift onto poor rates.
Frequently asked questions
Why quarterly compounding by default?
Because it is what nearly every Indian bank does for cumulative FDs. The Reserve Bank's conventions make quarterly the standard credit cycle; the selector lets you match monthly or yearly products where a bank differs.
Is FD interest taxable?
Yes, fully, at your slab rate — and banks deduct 10% TDS once your interest with them crosses the annual threshold. TDS is a prepayment, not the final tax; the balance settles when you file. Form 15G/15H avoids TDS when your total income is below the taxable limit.
What happens if I break the FD early?
You receive interest for the period actually held, at the rate that applied to that period when you opened the deposit, typically minus a 0.5–1% penalty. The originally quoted rate for the full tenure no longer applies.
How safe is a fixed deposit?
Deposits in scheduled banks are insured by DICGC up to ₹5,00,000 per depositor per bank, covering principal and interest together. Beyond that figure, you are relying on the bank itself — worth remembering when an unusually high rate is the attraction.
Is my financial data uploaded?
No. The arithmetic runs entirely in your browser — amounts, rates and results are never transmitted or stored anywhere.