How is FD interest calculated in India?

Banks in India calculate FD interest using quarterly compounding. The formula is A = P × (1 + R/400)^(4×T), where P is the principal, R is the annual interest rate, and T is the tenure in years.

What is the TDS on FD interest?

Banks deduct 10% TDS under Section 194A if annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). If PAN is not provided, 20% TDS is deducted. You can submit Form 15G/15H if your total income is below the taxable limit to avoid TDS.

Is FD interest taxable?

Yes, FD interest is added to your total annual income and taxed at your applicable income tax slab rate. It falls under "Income from Other Sources".

What is the minimum and maximum FD tenure?

FD tenures typically range from 7 days to 10 years. However, this calculator supports tenures from 1 year to 25 years for practical long-term planning.

How does quarterly compounding work?

In quarterly compounding, the interest earned in each quarter is added to the principal for the next quarter. This means interest earns interest four times a year, resulting in higher returns than annual compounding.

FD Calculator — Calculate Fixed Deposit Maturity & Interest | Fermor

What is a Fixed Deposit (FD)?

A Fixed Deposit (FD) is a financial instrument offered by banks and NBFCs where you deposit a lump sum at a predetermined interest rate for a fixed period. Unlike a savings account, the interest rate on an FD is locked in at the time of opening and does not change during the tenure — making it one of India's most trusted risk-free investment options.

Most Indian banks compound FD interest quarterly. Interest earned each quarter is added to the principal for the next quarter's calculation, giving you a slightly higher effective yield than simple interest at the same stated rate.

How can this FD calculator help you?

Manually applying quarterly compounding across multiple years is tedious and error-prone. This FD calculator helps you in the following ways:

•It provides instant and accurate maturity amounts and interest values in milliseconds.

•It lets you compare different tenures and interest rates side by side to maximize your returns.

•It helps you plan financial goals in reverse, finding out how much principal you need to invest today to build a specific corpus.

•It displays a year-by-year compounding growth schedule showing how interest builds up over time.

•It is completely free, runs locally in your browser, and requires no sign-ups or personal details.

Types of Fixed Deposits in India

This calculator works for any standard bank FD using quarterly compounding. The common choices for Indian savers include:

Regular FD

Standard deposits for resident individuals and HUFs. Capital is protected up to ₹5 Lakhs per bank under DICGC insurance. Typical rates: 6.5% – 7.75% p.a.

Senior Citizen FD

Banks offer a rate premium for depositors aged 60 and above. The higher rate applies automatically across all tenures. Typical premium: +0.25% to +0.75% extra.

Tax-Saving FD

5-year mandatory lock-in FD qualifying for ₹1.5L deduction under Section 80C. Premature withdrawal is not permitted. Typical rates: 6.5% – 7.5% p.a.

Flexi / Sweep-in FD

Linked to your savings account. Surplus funds auto-sweep into an FD for higher returns and sweep back when needed. Typical rates: Regular FD rates.

How to use this FD calculator

The calculator requires three simple inputs:

•Investment Amount: Enter the total principal you want to deposit. Use the slider or click on the value to type a specific sum.

•Rate of Interest: Enter the annual interest rate offered by your bank for the chosen tenure.

•Time Period: Set the tenure in years or months. Adjust to see how compounding affects long-term deposits.

How FD interest is calculated

Indian banks calculate FD interest using the standard quarterly compounding formula:

A = P × (1 + R/400)^(4 × T)

Where:

AMaturity Amount

Total value at end of tenure

PPrincipal

Amount you invest

RAnnual Rate

Stated interest rate in %

TTenure

Number of years

The division by 400 converts the annual percentage rate into a quarterly decimal rate (annual rate ÷ 4 ÷ 100). Interest is added to your principal every three months, meaning you earn interest on interest.

Frequently asked questions

Banks in India calculate FD interest using the quarterly compounding formula: A = P × (1 + R/400)^(4T), where P is the principal, R is the annual interest rate (in %), and T is the tenure in years. Interest earned each quarter is added to the principal, so each subsequent quarter earns slightly more than the last.