worldofcalcsFixed Deposit (FD) Calculator
FD Summary
About Fixed Deposits
A fixed deposit is a term investment offered by banks and NBFCs. Money stays locked for a chosen tenure, typically from a few days up to 10 years, and earns interest at a predetermined rate.
How this calculator helps
- Instantly estimates maturity value and interest earned.
- Handles simple and compound interest without manual math.
- Compare rates and outcomes by adjusting inputs and compounding.
Formulas
- Simple Interest: Simple Interest: M = P + (P × r × t / 100)
- Compound Interest: Compound Interest: M = P × (1 + i/100)^n, where i = r/m and n = t × m
How to use
- Enter principal, annual rate, and tenure.
- Select simple or compound; choose compounding for compound FD.
- Review the summary values shown above.
Overview of Fixed Deposits
- What: Deposit a fixed amount for a chosen tenure to earn interest.
- Who provides: Banks and NBFCs.
- Opening: Online or offline.
- Risk: Low; regulated by RBI.
- Premature withdrawal: Allowed per bank policy, typically with interest penalty.
Types of Fixed Deposits
- Standard: Fixed tenure; preset bank rate; 7 days to 10 years.
- Tax Saving: One-time deposit; 5-year lock-in; eligible up to ₹1.5 lakh under Section 80C.
- Special: Higher rate if funds remain beyond specified period.
- Regular Income: Periodic interest payout (monthly/quarterly).
- Senior Citizen: Additional interest (often ~0.50%) with flexible tenures.
- Flexi: Linked to savings account; surplus auto-sweeps to FD.
- Corporate/Company: Offered by companies/NBFCs; generally higher rates; assess credit ratings; unsecured and riskier than bank FDs.
Cumulative vs Non-cumulative
- Cumulative: Interest compounded (usually quarterly) and paid with principal at maturity.
- Non-cumulative: Interest paid out during the deposit term (monthly/quarterly/half-yearly/yearly).
FDs for NRIs
- NRE: Deposit foreign income; interest is tax-free; principal and interest repatriable; subject to exchange rate fluctuation.
- NRO: For income earned in India; interest taxable at 30% per IT Act; principal repatriable within limits; lower exchange rate risk.
Benefits
- Assured returns and relatively low risk.
- Higher rates than savings and recurring deposits.
- Tax-saving options under Section 80C with lock-in.
- Easy online opening and quick maturity estimate using this calculator.
What is a fixed deposit?
A fixed deposit (FD) lets you lock a lump sum with a bank, small finance bank or NBFC for a fixed period, at an interest rate agreed on the day you invest. The rate stays the same for that deposit even if market rates fall, which makes FDs predictable. Bank FDs are among the safest places for money in India, because deposits are insured by DICGC up to ₹5 lakh per depositor per bank. The trade-off is that FD interest is fully taxable at your slab rate, so the return after tax is often close to inflation.
FD maturity formula
P is the deposit, r the annual rate (7% = 0.07), n the number of times a year interest is compounded (4 for quarterly, which most banks use for cumulative FDs) and t the tenure in years. More frequent compounding earns slightly more: 7% compounded quarterly works out to an effective 7.19% a year. Non-cumulative FDs pay interest out monthly or quarterly instead, so they don't compound, and their total return is closer to simple interest.
FD rules worth knowing
- Deposit insurance: DICGC insures up to ₹5 lakh per depositor per bank, covering principal and interest together. Spread larger sums across banks.
- TDS: banks deduct 10% tax at source once your interest from that bank crosses ₹50,000 in a financial year (₹1 lakh for senior citizens), or 20% if they don't have your PAN. TDS is not the final tax; all FD interest is taxable at your slab rate.
- Form 15G / 15H: if the tax on your total income for the year is nil, submit Form 15G (or 15H if you're a senior citizen) to your bank to stop TDS.
- Senior citizens usually get 0.25%–0.75% more than the standard rate.
- Tax-saving FDs have a 5-year lock-in and qualify for the ₹1.5 lakh deduction under the old tax regime; their interest is still taxable.
- Breaking an FD early usually means a penalty of 0.5%–1% on the rate applicable for the time the money actually stayed invested.
Worked example: ₹1 lakh for 5 years at 7%
- Deposit ₹1,00,000 in a cumulative FD for 5 years at 7% a year, compounded quarterly (1.75% each quarter)
- After 1 year: ₹1,07,186, an effective annual yield of 7.19%
- After 5 years (20 quarters): ₹1,00,000 × (1.0175)²⁰ = ₹1,41,478
- Interest earned: ₹41,478, compared with ₹40,255 if compounded yearly and ₹35,000 as simple interest
- The interest is taxed at your slab rate. In the 30% slab (plus 4% cess) you keep about ₹28,537 of it
What ₹1 lakh grows to in an FD
Maturity value of a ₹1,00,000 cumulative FD with quarterly compounding, before tax.
| Interest rate | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| 6% | ₹1,06,136 | ₹1,19,562 | ₹1,34,686 | ₹1,81,402 |
| 6.5% | ₹1,06,660 | ₹1,21,341 | ₹1,38,042 | ₹1,90,556 |
| 7% | ₹1,07,186 | ₹1,23,144 | ₹1,41,478 | ₹2,00,160 |
| 7.5% | ₹1,07,714 | ₹1,24,972 | ₹1,44,995 | ₹2,10,235 |
| 8% | ₹1,08,243 | ₹1,26,824 | ₹1,48,595 | ₹2,20,804 |
FD rates differ by bank and tenure, and small finance banks often pay more than large banks. Check your bank's current rates before investing.