Work out what your fixed deposit will be worth at maturity, with the interest earned.
FD maturity formula
A = P × (1 + r ÷ n)^(n × t)Banks compound FD interest quarterly (n = 4). For a 7% FD that gives an effective yield of 7.19% a year.
Example
₹2,00,000 at 7% for 3 years, quarterly compounding → ₹2,46,288; interest ₹46,288.
Tips
- Senior citizens usually get 0.25–0.5% extra.
- TDS is deducted if interest exceeds ₹50,000 a year (₹1 lakh for seniors); submit Form 15G/15H if your income is below the taxable limit.
- Deposits up to ₹5 lakh per bank are insured by DICGC.
- Laddering FDs across tenures gives liquidity without breaking a big deposit.
Compare with the post office TD, RD and SIP.
How to use the FD calculator
- Enter the deposit amount and the interest rate the bank offers (check the senior-citizen rate if you are 60+).
- Set the tenure in years, months or days — FDs run from 7 days to 10 years.
- Pick the compounding (most banks: quarterly) and read the maturity value and interest.
- Compare the same amount across 1, 3 and 5 years — the best rate is often at an odd tenure like 444 or 777 days.
Step-by-step: ₹2,00,000 at 7% for 3 years (quarterly compounding)
A = P × (1 + r ÷ 4)4 × t- Quarterly rate: 7 ÷ 4 = 1.75% = 0.0175.
- Number of quarters: 3 × 4 = 12.
- Growth factor: 1.017512 = 1.2314.
- Maturity: 2,00,000 × 1.2314 = ₹2,46,288; interest ₹46,288.
With yearly payout instead of cumulative, you would receive ₹14,000 a year and get the ₹2,00,000 back — ₹4,288 less in total because the payouts do not compound.
Worked examples
| Situation | Working | Answer |
|---|
| ₹5,00,000 for 1 year at 7.25% | 5,00,000 × (1.018125)4 | ₹5,37,248 |
| ₹1,00,000 for 5 years at 6.5% | 1,00,000 × (1.01625)20 | ₹1,38,042 |
| ₹1,00,000 for 5 years, post office at 7.5% | see the Post Office FD Calculator | ₹1,44,995 |
Tips and common mistakes
- Tax: FD interest is added to your income and taxed at your slab; banks deduct 10% TDS above ₹50,000 interest a year (₹1 lakh for seniors). A 7% FD gives a 30%-slab taxpayer only 4.9% after tax.
- Only the 5-year tax-saver FD gives an 80C deduction, and it cannot be broken early.
- Deposit insurance (DICGC) covers ₹5 lakh per bank per depositor — split large amounts across banks.
- Laddering: split ₹5 lakh into five FDs maturing in 1–5 years so some money is always close to maturity.
Frequently asked questions
How is FD interest calculated?
Most banks compound quarterly: A = P × (1 + r/4)^(4t). ₹1 lakh at 7% for 1 year gives ₹1,07,186.
What is the interest on ₹5 lakh FD for 1 year?
At 7% with quarterly compounding, about ₹35,930; at 7.5%, ₹38,600.
Is FD interest taxable?
Yes, at your slab rate. Banks deduct 10% TDS when yearly interest crosses ₹50,000 (₹1 lakh for senior citizens).
Which is better, FD or RD?
An FD suits a lump sum; an RD suits monthly saving. Rates are similar — use both calculators to compare.