FD Calculator — Fixed Deposit Maturity Calculator
Calculations are for estimation purposes only. Actual maturity amounts may differ slightly due to bank-specific compounding methods and day-count conventions. Verify current FD rates with your bank before investing.
What is a Fixed Deposit (FD)?
A Fixed Deposit (FD) — also called a term deposit — is a savings instrument offered by banks and Non-Banking Financial Companies (NBFCs) where you deposit a lump sum for a fixed period at a predetermined interest rate. Unlike a savings account, you cannot withdraw the money before maturity without a penalty. In return, you receive a higher interest rate than a savings account.
FDs are one of the most popular investment instruments in India because they are low-risk, guaranteed-return products. The deposit is insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor per bank, making them effectively risk-free within this limit.
FD Formula — How Maturity Amount is Calculated
The maturity amount of a cumulative Fixed Deposit is calculated using the compound interest formula:
A = P × (1 + r/n)^(n × t)
| Variable | Meaning | Example |
|---|---|---|
| A | Maturity Amount (principal + interest) | ₹1,07,186 |
| P | Principal (initial deposit) | ₹1,00,000 |
| r | Annual interest rate (in decimal) | 0.07 (7%) |
| n | Compounding frequency per year | 4 (quarterly) |
| t | Tenure in years | 1 year |
Worked Example
You invest ₹1,00,000 in an FD at 7% per annum, compounded quarterly, for 2 years.
Cumulative vs Non-Cumulative FD
The most important choice when opening an FD is whether to choose a cumulative or non-cumulative payout structure.
| Feature | Cumulative FD | Non-Cumulative FD |
|---|---|---|
| Interest Payment | Compounded & paid at maturity | Paid monthly/quarterly/half-yearly |
| Total Return | Higher (interest earns interest) | Lower (no compounding benefit) |
| Regular Income | No | Yes |
| Ideal For | Long-term wealth accumulation | Retired individuals, regular income needs |
| Example (₹1L, 7%, 2 yrs) | ₹1,14,868 at maturity | ~₹583/month payout |
Compounding Frequency — Impact on Returns
The more frequently interest is compounded, the higher your effective return. Here is a comparison for ₹1,00,000 at 7% for 1 year across different compounding frequencies:
| Compounding | Times/Year | Maturity Amount | Effective Yield |
|---|---|---|---|
| Yearly | 1 | ₹1,07,000 | 7.000% |
| Half-Yearly | 2 | ₹1,07,123 | 7.123% |
| Quarterly | 4 | ₹1,07,186 | 7.186% |
| Monthly | 12 | ₹1,07,229 | 7.229% |
Most Indian banks use quarterly compounding for FDs. Some banks compound monthly. The difference is small for short tenures but meaningful over 3–5+ years. Always compare FDs using the Effective Annual Yield rather than the nominal rate.
FD Interest Rates — 2025-26 Reference
Interest rates vary by bank, tenure and depositor category (regular vs senior citizen). The following are approximate rates for 1-year FDs as of early 2026. Always verify on the bank's official website, as rates change frequently.
| Bank Type | Typical Range | Senior Citizen Benefit |
|---|---|---|
| Public Sector Banks (SBI, PNB, BoB) | 6.50% – 7.25% | +0.50% |
| Private Sector Banks (HDFC, ICICI, Axis) | 6.75% – 7.50% | +0.25% – 0.50% |
| Small Finance Banks | 8.00% – 9.50% | +0.25% – 0.50% |
| NBFCs (Bajaj Finance, etc.) | 7.50% – 8.50% | +0.25% |
Note: NBFC deposits are not covered by DICGC insurance. Assess credit ratings (AAA is safest) before choosing an NBFC FD for higher rates.
Tax on FD Interest
FD interest is taxable as Income from Other Sources at your marginal income tax slab rate. Key rules to remember:
- TDS is deducted at 10% if interest in a bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).
- If your total income is below the basic exemption limit, submit Form 15G (age below 60) or Form 15H (age 60+) to prevent TDS deduction.
- Interest must be declared in your ITR even if TDS was not deducted.
- FDs longer than 1 year — declare interest on accrual basis each year, not just at maturity.
- Tax-saving FDs under Section 80C have a 5-year lock-in and offer deduction up to ₹1.5 lakh.
Frequently Asked Questions
What is the formula for FD maturity amount?
For a cumulative FD, the maturity amount is A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate (in decimal), n is the number of times interest is compounded per year, and t is the tenure in years. For example, ₹1,00,000 at 7% compounded quarterly for 1 year: A = 1,00,000 × (1 + 0.07/4)^(4×1) = ₹1,07,186.
What is the difference between cumulative and non-cumulative FDs?
In a cumulative FD, interest is compounded and paid at maturity along with the principal. In a non-cumulative FD, interest is paid out periodically (monthly, quarterly, etc.) and only the principal is returned at maturity. Cumulative FDs give a higher effective return because the interest itself earns interest. Non-cumulative FDs are preferred by retirees or others who need regular income.
Which bank gives the highest FD interest rate in India?
Small finance banks and some private sector banks typically offer higher FD rates than large public sector banks. As of 2025-26, small finance banks offer 8–9.5% for select tenures, while large banks like SBI and HDFC offer 6.5–7.5%. Rates change frequently. Senior citizens typically get an additional 0.25–0.50% above regular rates. Always verify current rates directly on the bank's official website before investing.
Is FD interest taxable in India?
Yes. FD interest is fully taxable as "Income from Other Sources" at your applicable income tax slab rate. Banks deduct TDS at 10% when annual interest exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable threshold, you can submit Form 15G (for individuals below 60) or Form 15H (for senior citizens) to avoid TDS deduction. The interest must be declared in your ITR regardless of whether TDS was deducted.
What is effective annual yield and how is it calculated?
Effective Annual Yield (EAY) is the actual annual return earned after accounting for compounding. It is higher than the nominal rate when compounding is more than once a year. Formula: EAY = (1 + r/n)^n - 1, where r is nominal rate and n is compounding frequency per year. For example, 7% compounded quarterly: EAY = (1 + 0.07/4)^4 - 1 = 7.186%. This means your ₹1 lakh FD actually grows at 7.186% per year despite having a 7% nominal rate.
Related Calculators
- PPF Calculator — Public Provident Fund maturity value with year-by-year breakdown
- RD Calculator — Recurring Deposit with quarterly compounding
- SIP Calculator — Calculate mutual fund SIP returns vs FD returns
- Compound Interest Calculator — Compare compounding frequencies
- Simple Interest Calculator — Basic P × R × T calculation