How FD Calculator Works
Fixed Deposit (FD) is a safe investment where you deposit lump sum for fixed tenure at fixed interest rate. Interest compounds (typically quarterly) - you earn interest on interest. FDs offer guaranteed returns making them ideal for risk-averse investors.
Compound Interest Formula:
A = P × (1 + r/n)^(n×t)
A = Maturity amount
P = Principal
r = Annual interest rate (decimal)
n = Compounding frequency per year (4 for quarterly)
t = Time in years
Example Calculation
FD: ₹1,00,000 at 7% for 5 years, quarterly compounding
P = ₹1,00,000
r = 0.07, n = 4, t = 5
A = 1,00,000 × (1 + 0.07/4)^(4×5) = 1,00,000 × (1.0175)^20
Maturity = ₹1,41,478
Interest Earned = ₹41,478
Bank FD Rates (Indicative, 2026)
| Bank | 1 Year | 3 Years | 5 Years | Senior Extra |
|---|
| SBI | 6.80% | 6.75% | 6.50% | +0.50% |
| HDFC Bank | 7.00% | 7.00% | 7.00% | +0.50% |
| ICICI Bank | 6.70% | 7.00% | 6.90% | +0.50% |
| Axis Bank | 6.70% | 7.10% | 7.00% | +0.50% |
| PNB | 6.75% | 6.50% | 6.50% | +0.50% |
| Post Office | 6.90% | 7.10% | 7.50% | +0.50% |
| Small Finance Banks | 7.50-8.50% | 8.00-9.00% | 7.50-8.25% | +0.50% |
Tax on FD Interest
- TDS: Bank deducts 10% TDS if interest > ₹40,000/year (₹50,000 for senior citizens)
- Slab Rate: Interest income added to total income, taxed at applicable slab
- Form 15G/H: Submit to bank to avoid TDS if income below taxable limit
- Tax-saver FD: 5-year FD qualifies under 80C (₹1.5L deduction)
FD Tips
- Ladder FDs: Split lump sum into FDs of different tenures for liquidity
- Quarterly Payout: Choose interest payout if you need regular income
- Senior Citizen FDs: 0.50% extra rate - significant on long tenure
- Small Finance Banks: Higher rates (up to 9%), DICGC insured up to ₹5 lakh
- Sweep-in FD: Auto-converts excess savings balance to FD
FAQs
Q: Is FD safe?
Yes, FDs are insured up to ₹5 lakh per bank per depositor under DICGC scheme. Bank FDs are safer than equity. PSU banks safer than private. Small finance banks have similar protection.
Q: Can I break FD before maturity?
Yes, but you'll get reduced interest (typically 0.5-1% less) plus may pay penalty. Tax-saver FDs (5-year) cannot be broken before maturity.
Q: FD interest compounding frequency?
Most banks compound quarterly. Higher frequency (monthly) gives slightly more. Always confirm before opening FD.