Fixed Deposit (FD) Calculator
Calculate maturity amounts, quarterly compound interest earned, and regular periodic payouts for bank fixed deposits.
What Is a Fixed Deposit (FD)?
A Fixed Deposit (FD) is a traditional financial instrument provided by banks and Non-Banking Financial Companies (NBFCs) in India where an investor deposits a lump sum for a predetermined period at a guaranteed, fixed interest rate.
Unlike market-linked instruments (like mutual funds or stocks), bank fixed deposits offer 100% capital safety and assured returns unaffected by market movements. Furthermore, deposits across scheduled banks in India are protected up to ₹5 Lakh per depositor by the DICGC (an RBI subsidiary).
How Does an FD Calculator Work?
An FD calculator uses your deposit principal, interest rate, and tenure to compute the final returns based on standard Indian banking compounding rules:
- Cumulative Option: Interest is calculated and added to your principal every quarter, compounding over the full tenure and paid at maturity.
- Non-Cumulative Option: Interest is calculated as simple periodic yield and paid directly into your savings account each month or quarter.
How Is Fixed Deposit Interest Calculated?
For standard Cumulative FDs compounded quarterly in Indian banks:
For Non-Cumulative FDs, interest is paid out periodically: Periodic Payout = (P × r) / n, and the original principal P is returned at maturity.
Fixed Deposit Calculation Example
Let us compare a 5-year ₹1,00,000 bank deposit at 7.5% p.a. under both modes:
Quarterly compounding in the cumulative option generates ₹7,495 in extra interest because accrued interest is reinvested every 3 months.
How to Use the FD Calculator
- Select Payout Option: Choose 'Cumulative' for maximum growth or 'Non-Cumulative' for regular income.
- Enter Principal Deposit: Type the initial amount you want to place in the fixed deposit.
- Enter Interest Rate: Input the contracted annual interest rate offered by your bank (add 0.50% if senior citizen).
- Set Tenure in Years: Select the lock-in duration.
- View Maturity Breakdown: Review your total interest earned, final payout, and effective yield.
Cumulative FD vs Non-Cumulative FD
| Parameter | Cumulative FD | Non-Cumulative FD |
|---|---|---|
| Interest Payout | Paid at maturity along with principal | Paid monthly, quarterly, or annually |
| Compounding Benefit | Full quarterly compounding | No compounding (simple interest) |
| Best Suited For | Wealth accumulation & long-term goals | Retirees needing monthly pension income |
Important Tax & Regulatory Factors
1. Income Tax Slab:FD interest is added to your total income under 'Income from Other Sources' and taxed at your marginal slab rate (e.g. 10%, 20%, 30%).
2. TDS Deductions: Banks deduct 10% TDS if your total annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). If total income is below the taxable threshold, submit Form 15G / 15H to avoid TDS.
3. Premature Penalties: Breaking an FD before maturity incurs a penalty of 0.50%–1.00% lower interest.
Frequently Asked Questions
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