FD Calculator

A Fixed Deposit is a savings instrument offered by banks and NBFCs where you deposit a lump sum amount for a fixed period at a predetermined interest rate. FDs are one of the safest investment options in India, with DICGC insurance covering deposits up to Rs 5 lakh per bank per depositor.

FD interest is calculated using the compound interest formula: A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate, n is the compounding frequency, and t is the tenure in years. Most banks compound interest quarterly, which gives slightly higher returns than annual compounding.

In a cumulative FD, the interest is reinvested and compounded, so you receive the full maturity amount at the end. In a non-cumulative FD, interest is paid out periodically (monthly, quarterly, or yearly), giving you regular income but lower overall returns since you miss out on compounding.

Yes, FD interest is fully taxable as per your income tax slab. Banks deduct TDS at 10% if your annual FD interest exceeds Rs 40,000 (Rs 50,000 for senior citizens). You can save tax on FD by investing in a 5-year tax-saving FD, which qualifies for deduction under Section 80C up to Rs 1.5 lakh.

FD interest rates vary by bank and tenure. As of 2025, major banks offer 6.5-7.5% for general citizens and 7-8% for senior citizens on popular tenures. Small finance banks may offer higher rates of 8-9%. Rates change based on RBI policy and the bank's liquidity needs.

Yes, most banks allow premature withdrawal of FDs, but they typically charge a penalty of 0.5-1% on the applicable interest rate. Some banks offer a sweep-in FD facility where the FD is linked to your savings account and only the required portion is broken, minimising penalty.