How to use the FD calculator
- Enter the Deposit amount you are placing.
- Enter the Interest rate quoted by the bank.
- Set the Tenure in years — decimals are allowed, so 18 months is 1.5.
- Pick the Compounding frequency from your deposit terms.
- Read the maturity value and the interest earned.
Worked example
₹1,00,000 at 7.1% for 5 years compounded quarterly matures at about ₹1,42,175, of which roughly ₹42,175 is interest. The effective annual yield is about 7.29% — higher than the quoted 7.1% because interest is compounded during the year.
The compound interest formula
Maturity = P × (1 + r ÷ n)n × t
where P is the principal, r the annual rate as a decimal, n the compounding periods per year and t the tenure in years. Interest is maturity minus principal.
Effective yield = (1 + r ÷ n)n − 1
Compounding beats the headline rate
Banks quote a nominal annual rate. The more often interest is credited, the more the deposit actually earns. At 7.1%, annual compounding yields 7.10% while quarterly compounding yields about 7.29% — the difference is free money for the same headline.
Fixed deposits in practice
- Cumulative vs non-cumulative. Cumulative FDs reinvest the interest and pay a lump sum at maturity — that is what this calculator models. Non-cumulative FDs pay interest out periodically.
- Senior citizen rates. Most Indian banks add 50 basis points for depositors over 60.
- Premature withdrawal. Breaking an FD early usually costs 0.5–1% off the applicable rate.
- Taxation. Interest is taxed at your slab rate, and TDS applies once interest crosses the annual threshold. It is not a tax-free product.
- Insured up to a limit. Deposit insurance covers each depositor per bank up to the statutory ceiling, so very large sums may be worth splitting across banks.
FD or debt fund?
An FD delivers a certain return and is taxed at slab rates. A debt fund's return is not guaranteed but may be taxed more favourably on long holdings. Compare the after-tax numbers, not the headline rates.