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?expand_more
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?expand_more
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?expand_more
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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