What is the FD Calculator?
A Fixed Deposit (FD) is the most popular low-risk investment in India: you deposit a lump sum with a bank or NBFC for a fixed tenure at a guaranteed interest rate. Most Indian banks compound FD interest quarterly, which this calculator uses by default.
FDs currently offer roughly 6.5%–7.75% p.a. for regular depositors, with senior citizens typically earning an extra 0.25%–0.50%. Interest earned on FDs is fully taxable at your income-tax slab rate, and banks deduct TDS once interest crosses ₹50,000 in a year (₹1 lakh for senior citizens, FY 2025-26 limits).
FD Calculator Formula & How It Works
- A = Maturity amount
- P = Principal deposited
- r = Annual interest rate (decimal)
- n = Compounding frequency per year (4 for quarterly)
- t = Tenure in years
With quarterly compounding, every three months the bank adds interest to your principal, and the next quarter's interest is calculated on this larger amount. This makes the effective annual yield slightly higher than the quoted rate — for example, 7% compounded quarterly yields about 7.19% effectively.
Worked Examples
₹5 lakh for 5 years at 7% p.a.
With quarterly compounding the deposit grows to about ₹7,07,389 — total interest of roughly ₹2.07 lakh.
₹1 lakh for 1 year at 7.5% p.a.
Maturity value is about ₹1,07,714, an effective yield of 7.71% thanks to quarterly compounding.
Expert Tips
- Ladder your FDs across multiple tenures so you get liquidity at regular intervals without breaking deposits.
- Submit Form 15G/15H if your total income is below the taxable limit, to avoid TDS deduction.
- Compare small-finance-bank rates — they often pay 0.5%–1% more and carry the same ₹5 lakh DICGC insurance.