FD Calculator
Calculate fixed deposit maturity with compound interest
Is your FD actually growing your money?
An FD at 7.1% looks safe until you account for inflation and tax. At 5% inflation in the 30% bracket, your after-tax return is roughly 4.97%. Subtract inflation and your real return is negative — purchasing power is shrinking. FDs serve a purpose: emergency funds, short-term goals (1-3 years), capital you can't risk. For longer horizons, pair with equity SIPs or PPF.
How banks calculate your FD interest
Fixed deposits use compound interest, not simple interest. Most banks compound quarterly (n=4). Some online banks and credit unions compound monthly or even daily — always confirm the compounding frequency before locking in.
The FD tax trap most depositors miss
Tax withholding on interest income
Most banks withhold tax when your total FD interest exceeds a threshold — the rate and limit depend on your jurisdiction. Interest is typically taxed as ordinary income, so check with your tax authority for the exact rules.
Tax exemption forms can reduce withholding
If your total taxable income is below the filing threshold, many banks let you submit an exemption form so they skip withholding tax on your interest. You still need to report the interest on your annual return.
Tax is on accrual, not withdrawal
A 5-year cumulative FD doesn't mean tax is due only at maturity. Tax liability arises each year on accrued interest. Banks report this via Form 26AS. Failing to declare can trigger a notice.
FD vs other savings options
Senior citizen FD rates — the extra edge
Many banks offer senior customers (typically 60+) an additional 0.25% to 0.75% on FD rates. On a ₹25.0L deposit over 3 years, the senior rate can add ₹19K or more in extra interest. Always ask about preferential rates before opening a new deposit.
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Results are projections based on the interest rate and compounding frequency entered. Actual maturity may differ based on bank-specific terms, tax withholding, and early withdrawal penalties. Not financial advice — verify with your bank before booking.