What is a Fixed Deposit (FD)?

A Fixed Deposit is a secure financial instrument offered by banks and non-banking financial companies (NBFCs) in India where you invest a lump sum for a fixed tenure at a guaranteed interest rate.

How does the FD Calculator compute interest?

For tenures longer than 6 months, Indian banks generally calculate interest on a quarterly compounding basis. The formula is: A = P(1 + r/n)^(nt), where A is maturity value, P is principal, r is annual rate of interest, n is compounding frequency per year, and t is total years.

What is the difference between Cumulative and Non-Cumulative FDs?

In a Cumulative FD, interest is compounded and paid along with the principal at maturity, maximizing wealth growth. In a Non-Cumulative FD, interest is paid out at regular intervals (monthly, quarterly) to provide a steady income stream.

Fixed Deposit (FD) Calculator

Calculate Fixed Deposit (FD) interest and maturity amount online. Supports quarterly, monthly, half-yearly, and yearly compounding frequencies for all major Indian banks.

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How to Use Fixed Deposit (FD) Calculator

Enter the Principal Amount you wish to invest.
Enter the Annual Interest Rate (%) offered by the bank.
Enter the Tenure in years, months, or days.
Choose the compounding frequency (Quarterly is standard for Indian banks).
Review the total Invested Amount, total Interest Earned, and Maturity Value.

Understanding Fixed Deposits in India

Fixed Deposits (FDs) are one of the most popular savings options in India due to their low-risk nature and guaranteed returns. Unlike equity mutual funds or stocks, FDs are not subject to market volatility. The deposit insurance scheme (DICGC) also secures bank deposits up to ₹5 Lakhs per account, making FDs extremely safe.

FD Calculation & Compounding Formula

The maturity amount of a Fixed Deposit is calculated using the compound interest formula: **A = P × (1 + r / n)^(n × t)** Where: - **A**: Maturity Amount - **P**: Principal Investment Amount - **r**: Annual Rate of Interest (as a decimal, e.g. 7.1% = 0.071) - **n**: Number of compounding periods per year (monthly = 12, quarterly = 4, half-yearly = 2, yearly = 1) - **t**: Total tenure of the investment in years.

Tax Implications on FD Returns (TDS)

Interest earned on FDs is fully taxable under the head "Income from Other Sources". Banks deduct Tax Deducted at Source (TDS) at 10% if the annual interest exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable limit, you can submit Form 15G or Form 15H to prevent TDS deductions.

Frequently Asked Questions

What is a Fixed Deposit (FD)?: A Fixed Deposit is a secure financial instrument offered by banks and non-banking financial companies (NBFCs) in India where you invest a lump sum for a fixed tenure at a guaranteed interest rate.
How does the FD Calculator compute interest?: For tenures longer than 6 months, Indian banks generally calculate interest on a quarterly compounding basis. The formula is: A = P(1 + r/n)^(nt), where A is maturity value, P is principal, r is annual rate of interest, n is compounding frequency per year, and t is total years.
What is the difference between Cumulative and Non-Cumulative FDs?: In a Cumulative FD, interest is compounded and paid along with the principal at maturity, maximizing wealth growth. In a Non-Cumulative FD, interest is paid out at regular intervals (monthly, quarterly) to provide a steady income stream.