FD Calculator: Fixed Deposit Interest and Maturity

How the FD calculator works

Banks offer two kinds of fixed deposit:

• Cumulative FD: interest is added to the deposit every quarter and paid with it at maturity. Pick the first option in the calculator.
• Non cumulative FD: interest is paid out monthly or quarterly and the deposit stays the same. Pick monthly or quarterly payout.

For a cumulative FD the fd interest calculator uses A = P × (1 + r/400)^(4 × years). ₹1,00,000 at 7% for 3 years: 1.0175^12 = 1.23144, so the maturity value is ₹1,23,144 and the interest ₹23,144. The effective yearly yield is 7.19%, a little above the quoted 7%, because of quarterly compounding.

FD monthly interest and quarterly payout

On a non cumulative FD of ₹5 lakh at 7%:

Monthly interest is a shade lower than one third of the quarterly amount. Banks discount it because you get each payment earlier. The fd calculator monthly interest option follows that method. If you do not need the income, the cumulative option earns the most because interest compounds.

FD maturity for different tenures

Here is ₹1 lakh at 7% with quarterly compounding:

In real life the rate changes with tenure. Banks publish a rate card with different rates for 7 days, 1 year, 2 to 3 years and 5 years and above, and the best rate often sits in a middle bucket. Type the exact rate for your tenure from your bank's card into the fd rate calculator box.

TDS and tax on FD interest

The interest counts as income and faces tax at your slab each year as it accrues, even on a cumulative FD that pays only at maturity.

• Banks deduct 10% TDS when your interest from that bank crosses ₹50,000 in a year, or ₹1 lakh for senior citizens, under the current rules. Without a PAN on record the TDS is higher.
• If your total income is below the taxable limit, you can submit a self declaration to the bank in April so it does not deduct TDS.
• TDS is not the final tax. Claim it against your actual tax when you file your return.

A tax saving FD has a 5 year lock in and qualifies for the old regime deduction for small savings. A tax professional can confirm today's limits.

Senior citizen FD rates

Most banks pay residents aged 60 and above an extra 0.25% to 0.75% on FDs. On ₹5 lakh for 5 years, an extra 0.5% adds about ₹17,600 by maturity. Type the senior rate from your bank's card. Senior citizens should also compare the Senior Citizens Savings Scheme calculator and the post office MIS calculator, which can pay more on part of their savings.

Breaking an FD early

If you close an FD before maturity, the bank usually pays the rate for the period the deposit actually ran, minus a penalty, often 0.5% to 1%. A deposit booked at 7.25% for 3 years and closed after 14 months may earn only about 5.75%. The FD premature withdrawal calculator shows the amount you would get and what you lose.

If you need cash only for a short time, an overdraft against the FD can cost less than breaking it. The OD interest calculator shows that cost.

Bank FD vs post office and other deposits

Post office schemes are backed by the government. Bank FDs are covered by deposit insurance up to ₹5 lakh per depositor per bank, including interest. The post office calculator page compares all the post office schemes in one place.

Getting more from your FDs

1. Ladder them: split a large sum into FDs maturing every year, so some money is always free and you are not locked into one rate.
2. Match tenure to need: breaking early costs a penalty.
3. Stay within the insurance limit at any single bank if the amount is large.
4. Check auto renewal: a renewed FD takes the rate on the renewal date, which may be lower.
5. Look at the after tax rate: at a 30% slab, a 7% FD gives about 4.9% after tax.