FD Calculator (Fixed Deposit)

A fixed deposit (FD) is one of the safest savings instruments in India. You deposit a lump sum for a fixed tenure at an agreed interest rate, and the bank returns your principal plus interest at maturity. Interest is typically compounded quarterly. Banks call it a "time deposit" — the rate is locked for the tenure, unlike a savings account whose rate the bank can change — which is precisely why planners use FDs as the guaranteed anchor of a portfolio: predictable, insured and free of market risk.

The formula

Maturity = P × (1 + r/m)^(m × t)

• P — deposit amount
• r — annual interest rate (as a decimal)
• m — compounding periods per year (usually 4 for quarterly)
• t — tenure in years

Worked example

Deposit ₹1,00,000 at 7% for 5 years, compounded quarterly:

• Maturity = 1,00,000 × (1 + 0.07/4)^(4 × 5) = 1,00,000 × (1.0175)²⁰ ≈ ₹1,41,478

You earn ₹41,478 in interest. Compounding frequency squeezes out a little extra — the same deposit earns ₹1,40,255 if compounded yearly and ₹1,41,763 if compounded monthly — which is why almost every Indian bank quotes FDs on quarterly compounding. If you choose interest payout instead, the bank pays the interest out each period and returns only your ₹1,00,000 principal at maturity — the classic choice for retirees who want regular income without touching the capital.

A laddering strategy

Instead of one deposit, spread the money:

A ladder releases a staggered stream of maturities each year, so you are never forced to break a deposit early for cash flow, while the longer rungs keep earning higher, locked rates.

Things to know

• Senior citizens usually earn about 0.5% more on FDs — ask your bank.
• Interest earned on FDs is taxable as per your income-tax slab; banks deduct TDS on interest above certain thresholds, so factor the effective post-tax return into your planning.
• 5-year tax-saver FDs qualify for a deduction under Section 80C, but lock in your money for 5 years and have a lock-in on premature withdrawal.
• Deposit insurance covers up to ₹5 lakh per depositor per bank (through DICGC), so splitting large sums across banks is a genuinely useful habit.
• Premature withdrawal usually carries a penalty of about 0.5–1% of the rate, and some tenures change rate tiers if broken early — ask before you lock.

FD in a rising-rate world

When the RBI raises rates, new FDs earn more but your existing deposits stay at the old rate until maturity. The trick is to keep tenures moderate (1–3 years) while rates are climbing, then lock longer when rates look peaked. The calculator's compounding frequency selector lets you compare how quarterly versus monthly compounding changes the result for the deposit you are actually considering.