fincalculatorFD Calculator
Calculate your Fixed Deposit maturity amount and total interest earned with maximum accuracy using the latest quarterly compounding formulas.
A Fixed Deposit (FD) is one of the safest and most popular investment options in India. It guarantees a fixed rate of return for a specific tenure, unaffected by market volatility. Whether you are a senior citizen looking for regular income or a young professional saving for a short-term goal, FDs offer stability.
Our FD Calculator helps you determine exactly how much your investment will grow over time, factoring in the compounding frequency used by Indian banks.
Why use an FD Calculator?
While FDs seem simple, the interest calculation can be tricky because banks compound interest quarterly (every 3 months). A simple interest calculation will show a lower value than what you actually get.
This tool allows you to:
- Plan Investments: Know the maturity value of your savings.
- Compare Rates: Check how a 0.5% difference in interest rate affects your total earnings.
- Plan Taxes: Estimate your interest income to check if you need to pay tax.
Who Should Invest in FDs?
- Risk-Averse Investors: Those who cannot tolerate stock market volatility.
- Senior Citizens: Banks offer 0.50% extra interest to seniors, making FDs a great source of pension-like income.
- Emergency Fund Builders: FDs are highly liquid; you can withdraw money anytime (with a small penalty).
FD Interest Calculation Formula
Most banks in India use the Compound Interest formula with quarterly compounding.
Where:
- A = Maturity Amount
- P = Principal Investment
- r = Rate of Interest (in decimals, e.g., 7% = 0.07)
- n = Number of years
Note: For short-term FDs (less than 6 months), Simple Interest may apply.
Calculate FD Returns
Invested Amount
₹ 0
Total Interest
₹ 0
Maturity Value
₹ 0
Example Calculation
Scenario: You invest ₹1,00,000 in an FD for 5 years at 7% p.a.
- Principal (P): ₹1,00,000
- Rate (r): 0.07
- Tenure (n): 5 years
Using quarterly compounding:
- Maturity Amount: ₹1,41,478
- Interest Earned: ₹41,478
If this was calculated using Simple Interest, the interest would be only ₹35,000. Compounding adds ₹6,478 extra!
Taxation on Fixed Deposits
FD interest is fully taxable. It is added to your total income and taxed at your applicable slab rate.
- TDS: Banks deduct 10% TDS if interest exceeds ₹40,000 (₹50,000 for seniors) in a financial year.
- Form 15G/15H: If your total income is below the taxable limit, you can submit these forms to the bank to stop TDS deduction.
Frequently Asked Questions (FAQs)
How is FD interest calculated?
In India, FD interest is compounded quarterly. The formula is A = P x (1 + r/4)^(4n), where P is principal, r is annual rate, and n is years.
Is FD interest taxable?
Yes, FD interest is fully taxable as per your income tax slab. Banks deduct 10% TDS if interest income exceeds ₹40,000/year (₹50,000 for Senior Citizens).
What is the benefit of a 5-Year Tax Saving FD?
Investment in a 5-year Tax Saving FD qualifies for tax deduction under Section 80C (up to ₹1.5 Lakhs). However, these FDs have a lock-in period of 5 years.
Can I withdraw FD before maturity?
Yes, you can close an FD prematurely, but banks usually charge a penalty of 0.5% to 1% on the interest rate. Tax-saving FDs cannot be broken before 5 years.
Is FD safe?
Yes, Fixed Deposits in scheduled banks are highly safe. The DICGC (subsidiary of RBI) insures deposits up to ₹5 Lakhs per bank per holder.