How is FD interest calculated?

FD interest is calculated using compound interest formula: A = P(1 + r/n)^(nt), where P is principal, r is annual interest rate, n is compounding frequency (quarterly=4, monthly=12), and t is tenure in years. Interest can be quarterly, monthly or annually compounded.

What is the current FD interest rate in India?

As of 2026, FD interest rates in India range from 5.5% to 8.5% depending on the bank, tenure, and amount. Senior citizens get an additional 0.25% to 0.75%. Small finance banks typically offer higher rates than public sector banks.

Is FD interest taxable?

Yes, FD interest is fully taxable as per your income tax slab. Banks deduct TDS at 10% if annual interest exceeds ₹50,000 (₹1,00,000 for senior citizens) from FY 2025-26. You can submit Form 15G/15H if total income is below taxable limit to avoid TDS.

What is compounding frequency in FD?

Compounding frequency determines how often interest is added to principal. Quarterly compounding (4 times/year) is most common. Monthly compounding gives slightly higher returns than quarterly. Higher compounding frequency results in better maturity amount.

Can I withdraw FD before maturity?

Yes, you can prematurely withdraw FD but banks charge a penalty of 0.5% to 1% on the applicable interest rate. Interest is recalculated for actual deposit period at reduced rate. Some banks don't allow premature withdrawal for very short durations.

What is the minimum and maximum FD amount?

Minimum FD amount is typically ₹1,000 for most banks, though some allow ₹5,000 or ₹10,000. There's no maximum limit for FD deposits. Tax-saving FDs under Section 80C have a minimum of ₹100 and maximum deduction of ₹1.5 lakh.

Which gives better returns - FD or SIP?

SIP in equity mutual funds historically delivers 12-15% returns long-term but with market risk. FDs give guaranteed 5.5-8.5% returns with zero risk. Choose FD for safety and guaranteed returns, SIP for long-term wealth creation with higher risk-reward ratio.

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FD Calculator · FY 2026-27

Fixed deposit returns,
compounded for you.

See exact maturity value across compounding frequencies. Senior-citizen rates supported. No signup, no ads in results.

Last updated: April 17, 2026 FY 2026-27 / AY 2027-28

Your FD details

Drag the sliders or type a value. Numbers update instantly.

Deposit amount ₹5 L

₹

Interest rate 7.0% p.a.

% p.a.

Tenure 5 years

years

Compounding frequency

Senior citizen (60+, gets +0.5% rate)

Quick scenarios

Maturity amount

₹7,07,389

5 years · 7.0% · quarterly compounding

Principal

₹5,00,000

Interest

₹2,07,389

Effective yield 7.19%

Maturity amount ₹0

How FD interest is calculated

Fixed deposits earn compound interest using the formula:

A = P × (1 + r/n)^{n × t}

P - principal (your deposit)
r - annual interest rate (as a decimal)
n - compounding periods per year
t - tenure in years

More frequent compounding gives a slightly higher effective yield. Quarterly is the Indian banking default.

Effective yield

The "effective yield" is the rate you actually earn after compounding. At 7% with quarterly compounding, the effective yield is about 7.19% - small advantage, but real.

FD tax & TDS rules (FY 2025-26)

FD interest is fully taxable at your income slab rate, year by year (cash or accrual basis).
TDS applies when annual interest exceeds ₹50,000 (₹1,00,000 for senior citizens) per bank.
TDS rate is 10% with PAN; 20% without PAN.
Form 15G/15H can suppress TDS if your total income is below the taxable threshold.
Section 80TTB - senior citizens get a ₹50,000 interest income deduction on FDs.

Tax-saver FDs

Some FDs qualify under Section 80C (deduction up to ₹1.5L/year) but require a 5-year lock-in and no premature withdrawal. Interest is still taxable.

Senior citizen rates

Most banks offer 0.25–0.50% extra to citizens aged 60+. Tick the box on the form to apply the bump.

Common questions

Frequently asked questions

How does compounding frequency affect my FD?

More frequent compounding means interest is added back to the principal more often, giving you slightly more total interest. Quarterly is the Indian default; monthly is marginally better, annual marginally worse.

Is FD interest tax-free?

No. FD interest is fully taxable at your slab rate. TDS at 10% applies once annual interest exceeds ₹50,000 (₹1L for senior citizens) per bank.

Can I break my FD early?

Yes, but premature withdrawal usually attracts a penalty of 0.5%–1% on the applicable rate. Tax-saver FDs (5-year lock-in) cannot be broken before maturity.

Do senior citizens really get better rates?

Yes - most banks offer 0.25%–0.50% extra to citizens aged 60+. The TDS threshold is also higher (₹1L vs ₹50k). Section 80TTB allows ₹50,000 of FD interest as tax-free.

Is an FD better than a debt mutual fund?

FDs offer guaranteed returns with no market risk; debt MFs may give slightly higher returns but face credit and interest-rate risk. After Budget 2023, debt MF gains are taxed at slab rate (no indexation), making FDs more competitive on a post-tax basis for many investors.

How safe are FDs?

Bank FDs are insured up to ₹5 lakh per bank per depositor under the DICGC. Choose scheduled commercial banks for maximum safety. Corporate FDs offer higher rates but carry credit risk.

Disclaimer: Maturity values and TDS estimates are illustrative. Actual FD returns depend on the bank's exact rate, compounding cycle, premature-withdrawal penalties, and your overall tax position. Verify the official schedule with your bank before depositing.

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Fixed deposit returns,
compounded for you.

Your FD details

TDS estimate on FD interest

How FD interest is calculated

Effective yield

FD tax & TDS rules (FY 2025-26)

Tax-saver FDs

Senior citizen rates

Frequently asked questions

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Fixed deposit returns,compounded for you.

Your FD details

TDS estimate on FD interest

How FD interest is calculated

Effective yield

FD tax & TDS rules (FY 2025-26)

Tax-saver FDs

Senior citizen rates

Frequently asked questions

Related guides & scenarios

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Fixed deposit returns,
compounded for you.