FD Calculator

How fixed deposit interest works

Choose simple or compound interest, then enter your deposit amount, the interest rate and the tenure. The calculator shows the interest you will earn, your maturity amount and the effective annual yield.

Formulae

• Simple interest: interest = principal × rate × years.
• Compound interest: maturity amount = principal × (1 + r ÷ n)^{n × years}.
• Effective yield: (1 + r ÷ n)ⁿ − 1.

Rates vary by bank and tenure — confirm the current rate before you invest. Regular FD interest is taxable and TDS may apply, while a 5-year tax-saving FD qualifies under Section 80C. For tax-free long-term growth, consider PPF.

Frequently Asked Questions

How is FD interest calculated?

Most banks compound fixed deposit interest quarterly: maturity amount = principal × (1 + r ÷ n)^(n × years), where r is the annual rate and n is the number of compounding periods per year. Short-tenure deposits may use simple interest.

What is the effective yield on an FD?

The effective annual yield reflects what you actually earn over a year once compounding is taken into account. Quarterly compounding gives a slightly higher effective yield than the stated annual rate.

Is FD interest taxable in India?

Yes. Interest on a regular FD is fully taxable as per your income tax slab, and banks deduct TDS if your interest exceeds the threshold in a financial year. You can submit Form 15G/15H if your income is below the taxable limit.

What is a tax-saving FD?

A 5-year tax-saving fixed deposit qualifies for a deduction of up to ₹1.5 lakh under Section 80C. It has a mandatory 5-year lock-in and the interest earned is still taxable.

FD vs. PPF — which is better?

FDs offer fixed, predictable returns and flexible tenures but the interest is taxable. PPF offers tax-free interest and a Section 80C deduction with a 15-year tenure, making it better for long-term, tax-efficient saving. Many investors use both.