How do banks compound FD interest?

Most Indian banks compound quarterly for cumulative deposits: the rate is divided by four and applied every three months. Maturity = P × (1 + r/4)^(4n). A few products compound monthly or annually, and non-cumulative FDs pay simple interest out monthly or quarterly instead of reinvesting it.

Is FD interest taxable?

Yes, fully, at your slab rate, in the year it accrues, whether or not it is paid out. Banks deduct TDS at 10 percent once interest across the bank exceeds ₹50,000 in a year (₹1,00,000 for senior citizens, from FY 2025-26). Submit Form 15G or 15H if your total income is below the taxable limit to avoid TDS.

What is the senior citizen FD rate?

Banks typically add 0.25 to 0.50 percentage points for depositors aged 60 and above, and some add a further premium above 80. Enter the rate your bank quotes; the calculator does not assume one.

What happens if I break an FD early?

The bank pays interest at the rate applicable to the period the deposit actually ran, usually less a penalty of 0.5 to 1 percent. The calculator shows the contractual maturity; it does not model premature withdrawal.

Is a 5-year tax-saver FD different?

The interest is computed the same way, but the deposit qualifies for Section 80C deduction up to ₹1.5 lakh under the old regime, has a 5-year lock-in, and the interest remains taxable.

Fixed Deposit Calculator

Maturity amount and interest on a bank FD, with the compounding frequency your bank actually uses.

Switch tool

Deposit amount (₹)

₹

Interest rate

% p.a.

Years

+ months

Compounding

Most Indian banks compound cumulative FDs quarterly. Simple = interest paid out, not reinvested.

At maturity

Principal

₹ 1,00,000

Interest earned1.00 years

₹ 7,186

Maturity amount

₹ 1,07,186

Illustrative only. Enter the rate your bank quotes. Interest is taxable at slab rate; premature withdrawal penalties are not modelled.

How it works

Compounding

The annual rate is divided by the number of periods and applied each period. Quarterly is the Indian default.

Tenure

Years plus months; odd tenures like 1 year 3 months are common for special rates.

Simple interest

For payout FDs the interest is paid to you each period rather than added to the deposit.

The maturity figure your bank will print

Banks quote an annual rate but credit interest quarterly, which is why the maturity amount is a little higher than rate × years. Enter the deposit, the quoted rate and the tenure, choose the compounding your bank uses, and the calculator shows the maturity value and the interest component, with a flag when TDS will apply.

Five frequencies

Quarterly, monthly, half-yearly, annual, or simple interest for payout deposits.

TDS flag

₹50,000 a year across the bank; ₹1,00,000 for senior citizens.

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A higher rate compounded annually can lose to a lower rate compounded monthly; check both.

Tax-saver FD

Same arithmetic, 5-year lock-in, 80C deduction under the old regime.