Year-by-Year FD Growth
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FD Calculator – Fixed Deposit Interest Calculator
A Fixed Deposit (FD) is one of the safest and most popular investment options in India. It involves depositing a lump sum with a bank or NBFC for a fixed tenure at a predetermined interest rate. An FD calculator helps you estimate the maturity amount and total interest earned on your deposit based on the principal, tenure, interest rate, and compounding frequency.
FDs are favoured by conservative investors and senior citizens for their guaranteed returns, capital protection, and predictable income. They are also used for emergency fund parking and short-term financial goals.
What is an FD Calculator?
An FD calculator is a free online tool that computes the maturity amount of your fixed deposit using compound interest. Unlike a simple interest calculator, it accounts for the compounding frequency — how often interest is added to the principal (quarterly, monthly, half-yearly, or annually).
Most Indian banks compound FD interest quarterly by default, which means interest is added to your principal every 3 months, and subsequent interest is calculated on this larger amount. This makes your actual return slightly higher than the stated annual rate.
How Does the FD Calculator Work?
The FD calculator uses the compound interest formula:
A = P × (1 + r/n)^(n × t)
Where:
- A = Maturity amount
- P = Principal amount (initial deposit)
- r = Annual interest rate (as a decimal)
- n = Compounding frequency per year (4 for quarterly, 12 for monthly)
- t = Tenure in years
Example: For a deposit of ₹5,00,000 at 7% for 5 years with quarterly compounding:
A = 5,00,000 × (1 + 0.07/4)^(4×5) = 5,00,000 × (1.0175)^20 = ₹7,07,393 approximately
Total interest earned = ₹2,07,393.
FD Interest Rates in India (2026)
FD rates vary by bank, deposit amount, and tenure. Here’s a general overview for 2026:
- Major banks (SBI, HDFC, ICICI) — 6.5-7.25% for regular citizens, 7-7.75% for senior citizens on 1-3 year deposits.
- Small finance banks — 7.5-8.5%, sometimes up to 9% for specific tenures. These are also covered under DICGC insurance up to ₹5 lakh.
- Corporate FDs (AAA-rated) — 7.5-8.5% but carry slightly higher risk than bank FDs.
- Post Office Time Deposits — 6.9-7.5% backed by Government of India.
Senior citizens typically receive an additional 0.25-0.5% interest rate above the regular rate.
Types of Fixed Deposits
- Regular FD — Standard deposit with interest compounded and paid at maturity. Most common type.
- Tax-saving FD — 5-year lock-in period. Investment up to ₹1.5 lakh qualifies for Section 80C deduction under old tax regime.
- Senior Citizen FD — Higher interest rate (0.25-0.5% extra) for depositors aged 60 and above.
- Cumulative FD — Interest is compounded and paid at maturity. Best for wealth accumulation.
- Non-cumulative FD — Interest is paid out monthly/quarterly/annually. Ideal for regular income needs (pensioners).
- Flexi FD — Links savings account with FD. Excess funds are automatically moved to FD and withdrawn when needed.
FD vs Other Investment Options
- FD vs RD: FD is a one-time deposit; RD is monthly. FD gives slightly higher effective returns due to full compounding from day one.
- FD vs Debt Mutual Funds: FD offers guaranteed returns; debt funds are market-linked but can be more tax-efficient for high-income investors.
- FD vs PPF: PPF offers higher returns (7.1%) with tax-free interest but has a 15-year lock-in. FD offers flexible tenures from 7 days to 10 years.
- FD vs SIP: FD is risk-free with lower returns (6-8%). SIP in equity funds offers higher potential returns (12-15%) but with market risk.
Frequently Asked Questions
As of February 2026, top rates are: SBI 6.5-7%, HDFC Bank 6.6-7.25%, Small Finance Banks 7.5-8.5%. Senior citizens get additional 0.25-0.5%. For the best rate, compare across banks and NBFCs, and consider small finance banks which are equally safe up to ₹5 lakh deposit (DICGC insured).
Yes, FD interest is added to your total income and taxed at your income tax slab rate. Banks deduct TDS at 10% if your annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable limit, you can submit Form 15G (or 15H for seniors) to avoid TDS deduction.
In cumulative FD, interest is compounded and paid at maturity along with the principal — best for wealth building. In non-cumulative FD, interest is paid out at regular intervals (monthly, quarterly, or annually) — ideal for those needing regular income like retirees. Cumulative FDs give slightly higher total returns due to compounding.
Yes, most banks allow premature FD withdrawal with a penalty of 0.5-1% reduction from the applicable interest rate. For example, if your FD rate is 7% and you break it early, you may get only 6-6.5% for the period the money was deposited. Tax-saving FDs cannot be broken before the 5-year lock-in period.
Yes, up to ₹5,00,000. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of RBI, insures bank deposits up to ₹5 lakh per depositor per bank. This covers principal and interest combined. To protect larger amounts, consider spreading deposits across multiple banks.
Compounding frequency determines how often interest is added to the principal. Monthly compounding gives the highest returns, followed by quarterly, half-yearly, and annually. For a ₹10 lakh FD at 7% for 5 years: monthly compounding yields ₹14,17,625, quarterly yields ₹14,14,782, and annually yields ₹14,02,552. Most Indian banks use quarterly compounding by default.
Yes, banks offer loans against FDs at 1-2% above the FD interest rate. You can typically borrow up to 75-90% of the FD amount. This is one of the cheapest loan options since the FD serves as collateral. The FD continues to earn interest during the loan period.
A tax-saving FD has a mandatory 5-year lock-in period and allows you to claim deduction under Section 80C of the Income Tax Act up to ₹1.5 lakh per year under the old tax regime. However, the interest earned is fully taxable. This benefit is not available under the new tax regime. The interest rate is same as a regular FD of equivalent tenure.