FD Calculator

Fixed Deposit (FD) Calculator

Fixed Deposit (FD) Calculator

Introduction

The Fixed Deposit (FD) Calculator shows you exactly how much your investment will grow to at maturity — combining your principal amount with the interest earned. This tool is essential for estimating returns before locking your money into a bank FD.

How to Use

  1. Enter the Principal Amount you plan to deposit
  2. Enter the Annual Interest Rate offered by your bank
  3. Enter the Time Period (in years) for the deposit
  4. Click "Calculate Maturity Amount" to see your result instantly

Formula Explanation

A = P (1 + r/n)nt

Where P = Principal, r = annual interest rate, n = compounding frequency per year, t = number of years.

Worked Example

Suppose you deposit ₹1,00,000 in an FD at 7% annual interest, compounded quarterly, for 5 years. Using the formula above, your maturity amount would be approximately ₹1,41,478 — meaning you earn about ₹41,478 in interest over the tenure. This shows why comparing compounding frequency across banks matters before investing.

Practical Context

Fixed Deposits are one of the most popular and safest investment options, especially for senior citizens who often receive an extra 0.25–0.50% interest. Most banks compound FD interest quarterly, and current FD rates typically range between 6–7.5% depending on the bank and tenure. TDS applies if the annual interest exceeds ₹40,000 (₹50,000 for senior citizens).

Frequently Asked Questions

Q1: What penalty applies for premature FD withdrawal?
Most banks charge a 0.5–1% penalty on premature withdrawal, and the applicable interest rate is also reduced.

Q2: Is FD interest taxable?
Yes, FD interest is taxed under "Income from Other Sources" according to your applicable income tax slab.

Q3: What's the difference between cumulative and non-cumulative FDs?
Cumulative FDs pay out interest at maturity along with the principal (benefiting from compounding), while non-cumulative FDs pay interest periodically (monthly/quarterly).

Q4: Which banks generally offer the best FD rates?
Small finance banks and NBFCs often offer 0.5–1% higher rates than large public sector banks, though it's worth checking their credit ratings and deposit insurance coverage first.

Q5: Can I open multiple FDs at the same bank?
Yes, many people open multiple FDs with different amounts and tenures ("FD laddering") to maintain liquidity while earning competitive interest.