Fixed Deposit (FD) Calculator
Calculate your FD maturity amount and interest earnings with compound interest
Guide
How it works
How FD Interest Works
Fixed Deposit (FD) is a safe investment option where you deposit a lump sum for a fixed period and earn guaranteed returns through compound interest. Your interest earnings are reinvested to generate more interest.
Key Benefits:
- Guaranteed returns with no market risk
- Higher interest than savings accounts
- Insurance up to ₹5 lakh per bank (DICGC)
- Tax deduction under Section 80C (for tax-saver FDs)
Tip: Quarterly compounding typically offers better returns than annual compounding due to more frequent interest reinvestment.
What is the difference between compounding frequencies?
Monthly compounding gives the highest returns as interest is calculated and added 12 times a year, followed by quarterly (4 times) and annually (once). The more frequent the compounding, the higher your maturity amount.
Can I withdraw my FD before maturity?
Yes, but premature withdrawal typically attracts a penalty (usually 0.5-1% reduction in interest rate). Some banks also charge processing fees for early withdrawal.
Are FD returns taxable?
Yes, FD interest is fully taxable as per your income tax slab. Banks deduct TDS if your interest income exceeds ₹40,000 per year (₹50,000 for senior citizens).
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