Fixed deposits remain one of the most trusted investments for millions of Indians — safe, predictable and guaranteed.
This free FD Calculator tells you exactly how much your fixed deposit will grow by maturity. Enter your principal amount, interest rate and tenure, choose compounding frequency — and instantly see your maturity value, total interest earned and effective annual yield. Compare current FD rates from SBI, HDFC, ICICI and top banks all in one place.
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 period at a predetermined interest rate. Unlike savings accounts where rates fluctuate, FD rates are locked in at the time of booking — giving you complete certainty about returns.
Key characteristics of FDs:
Guaranteed returns — The interest rate is fixed at the time of investment and does not change with market conditions.
DICGC insurance — Bank FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor per bank. This makes them virtually risk-free for amounts up to this limit.
Flexible tenure — You can choose tenure from 7 days to 10 years based on your financial goals.
Premature withdrawal — Most FDs allow premature withdrawal with a penalty of 0.5% to 1% on the applicable rate. Some banks offer no-penalty premature withdrawal FDs.
Loan against FD — You can take a loan of up to 90% of your FD value without breaking the deposit — a significant liquidity advantage.
How FD Maturity Amount is Calculated
For Cumulative FD (compound interest):
A = P × (1 + r/n)^(n×t)
Where:
A = Maturity amount
P = Principal amount
r = Annual interest rate (as decimal)
n = Number of times interest is compounded per year
t = Tenure in years
Example — ₹1,00,000 at 7% for 3 years, quarterly compounding:
A = 1,00,000 × (1 + 0.07/4)^(4×3) A = 1,00,000 × (1.0175)^12 A = 1,00,000 × 1.2314 A = ₹1,23,144
Interest earned = ₹1,23,144 − ₹1,00,000 = ₹23,144 Effective annual yield = 7.19% (higher than nominal 7% due to quarterly compounding)
For Non-Cumulative FD (simple interest paid periodically):
Interest = P × r × t
The principal remains unchanged and interest is paid monthly, quarterly or annually to your bank account.
Which FD Type Should You Choose?
Cumulative FD: Interest is reinvested and compounds until maturity. You receive principal + all interest at the end. Best for wealth building and long-term goals where you do not need regular income.
Non-Cumulative FD: Interest is paid out periodically — monthly, quarterly, half-yearly or annually. Principal is returned at maturity. Best for retired individuals or anyone needing regular income from their investment.
Example comparison — ₹5 lakh at 7% for 5 years:
Type Interest Payout Maturity Value Total Interest
Cumulative At maturity ₹7,07,653 ₹2,07,653
Non-Cumulative (monthly) ₹2,917/month ₹5,00,000 ₹1,75,020
Cumulative FD earns more total interest because compounding reinvests each interest payment.
Higher FD Rates for Senior Citizens
Banks in India offer an additional 0.25% to 0.75% higher interest rate to senior citizens (age 60 and above) on fixed deposits. This has been a long-standing tradition in Indian banking and significantly benefits retirees.
Example — impact on returns:
₹10 lakh FD at 7% for 3 years:
Regular customer: Maturity = ₹12,25,044
Senior citizen at 7.5%: Maturity = ₹12,49,891
Extra earning: ₹24,847 — just for being a senior citizen
Some banks offer even higher rates of 0.5% to 1% extra for senior citizens, particularly on tax-saving FDs.
Is FD Interest Taxable?
Yes. Interest earned on FDs is fully taxable as per your income tax slab rate.
TDS on FD interest: Banks deduct TDS (Tax Deducted at Source) at 10% if your total FD interest in a financial year exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable limit, you can submit Form 15G (or Form 15H for senior citizens) to your bank to avoid TDS deduction.
Tax implications at different slab rates:
Tax Slab FD Interest Tax Effective Post-Tax Return (on 7% FD)
5% slab 5% 6.65%
20% slab 20% 5.60%
30% slab 30% 4.90%
This is why high-income earners often prefer tax-efficient alternatives like ELSS mutual funds, PPF or tax-free bonds over FDs for long-term wealth building.
Frequently Asked Questions
Q1. What is the current FD interest rate in SBI ? SBI FD rates range from 3.5% for 7-day deposits to 7.1% for 2-year to 3-year tenures for regular customers. Senior citizens get an additional 0.5%, taking the peak rate to 7.6%. Rates change periodically — always check SBI's official website for the latest rates before booking.
Q2. How much will ₹1 lakh grow in 5 years in FD? At 7% with quarterly compounding, ₹1 lakh grows to approximately ₹1,41,478 in 5 years. At 7.5%, it grows to ₹1,44,995. Use our calculator to check for the exact rate offered by your bank.
Q3. What is the maximum amount insured in a bank FD? DICGC (Deposit Insurance and Credit Guarantee Corporation) insures bank deposits including FDs up to ₹5 lakh per depositor per bank. This covers principal plus interest together. If you have more than ₹5 lakh to deposit safely, consider spreading across multiple banks.
Q4. Can I break my FD before maturity? Yes. Most banks allow premature FD withdrawal but with a penalty of 0.5% to 1% on the interest rate applicable for the period the FD was held. Some banks offer special no-penalty FDs. Tax-saving FDs have a mandatory 5-year lock-in and cannot be broken prematurely.
Q5. What is a tax-saving FD and how does it work? Tax-saving FDs have a mandatory lock-in period of 5 years and qualify for deduction under Section 80C of the Income Tax Act up to ₹1.5 lakh per year. The interest is taxable as per your slab rate. They cannot be broken before 5 years and loans cannot be taken against them.
Q6. Which bank gives the highest FD interest rate in India ? Small Finance Banks like Unity Small Finance Bank, Utkarsh Small Finance Bank and Suryoday Small Finance Bank typically offer the highest FD rates of 8.5% to 9.5% in India. However these banks have lower DICGC insurance meaning amounts above ₹5 lakh carry some risk. For safety, stick to large scheduled commercial banks like SBI, HDFC, ICICI which offer rates of 6.5% to 7.25%.
Q7. Is quarterly compounding better than annual compounding for FD? Yes. Quarterly compounding gives a higher effective yield than annual compounding. On a ₹1 lakh FD at 7% for 3 years, quarterly compounding gives ₹1,23,144 while annual compounding gives ₹1,22,504 — a difference of ₹640. The difference grows larger with bigger amounts and longer tenures.
Q8. What is the difference between FD and RD? FD (Fixed Deposit) requires a lump sum investment upfront. RD (Recurring Deposit) allows monthly investments of a fixed amount. FDs typically offer slightly higher rates than RDs. FD is better if you have a lump sum. RD is better if you want to invest monthly from salary.
Q9. Can NRIs invest in FDs in India? Yes. NRIs can invest in NRE (Non-Resident External) FDs or NRO (Non-Resident Ordinary) FDs. NRE FD interest is completely tax-free in India and fully repatriable. NRO FD interest is taxable. NRE FD rates are typically similar to regular FD rates.
Q10. How is FD different from PPF in terms of returns and tax? FDs offer flexible tenure from 7 days to 10 years with guaranteed returns of 6.5% to 7.5% but interest is fully taxable. PPF has a 15-year lock-in, offers 7.1% (current rate, subject to quarterly revision) and is completely tax-free — EEE status (Exempt at investment, Exempt during growth, Exempt at maturity). For long-term goals PPF is usually better than FD for tax efficiency.
How to Use the FD Calculator
Step 1 — Enter principal amount Type the amount you want to deposit. FDs in India can start from as low as ₹1,000 in most banks with no maximum limit.
Step 2 — Enter interest rate Enter the annual interest rate offered by your bank. Rates vary between banks — check the comparison table below the calculator for current rates.
Step 3 — Select tenure Enter the deposit period in years. FD tenures typically range from 7 days to 10 years. Note that the highest rates are usually offered on 1-year to 3-year tenures.
Step 4 — Select compounding frequency Choose how often interest is compounded — Annually, Quarterly or Monthly. Quarterly compounding (the standard in most Indian banks) gives a higher effective return than annual compounding.
Step 5 — Read your results The calculator shows your maturity value, total interest earned, effective annual yield and a principal vs interest split.