Fixed Deposit (FD) Calculator
Calculate bank FD maturity proceeds with quarterly compounding, as mandated by Indian commercial banks.
Maturity after 3 years with quarterly compounding (Effective Rate: 7.29%)
FD Principal vs Interest Accrual
Compounding trajectory over time
Senior Citizen Rate Advantage (+0.50% p.a.)
Comparing standard 7.1% vs senior citizen rate 7.60% for ₹2,00,000 over 3 years
Yearly Fixed Deposit Accrual
Detailed breakdown for each calendar year
| Year | Deposit Amount | Interest Accrued | Cumulative Balance |
|---|---|---|---|
| Year 1 | ₹2,00,000 | ₹14,583 | ₹2,14,583 |
| Year 2 | ₹2,00,000 | ₹30,228 | ₹2,30,228 |
| Year 3 | ₹2,00,000 | ₹47,015 | ₹2,47,015 |
How this is Calculated: Fixed Deposit Maturity
Mathematical Formula
Variable Definitions
Worked Example Walkthrough
Scenario: ₹2,00,000 bank fixed deposit for 3 years at 7.10% p.a. with quarterly compounding.
Calculation: P = 2,00,000, r = 0.071, t = 3, n = 4. A = 2,00,000 × (1 + 0.071 / 4)^(4 × 3)
Result: Principal: ₹2,00,000 | Interest Earned: ₹47,015 | Total Maturity Value: ₹2,47,015
Assumptions & Methodology
- Indian commercial banks compound FD interest once every calendar quarter.
- TDS deduction threshold under Section 194A is not automatically subtracted.
About this Calculation Model
The Fixed Deposit (FD) Calculator determines the total interest earned and final maturity proceeds for term deposits in Indian commercial banks. It applies official Reserve Bank of India quarterly compounding standards, calculating the exact effective annual yield across any deposit amount and tenure.
How to Choose Your Calculator Inputs
1Total Deposit Amount
The principal lump sum placed in the fixed term deposit.
2Interest Rate (p.a.)
The nominal contracted interest rate offered by the bank.
3Tenure (Years)
The locked duration of the term deposit.
Interpreting Your Projections
Notice that the "Effective Rate" is slightly higher than the nominal contracted rate due to quarterly compounding. For example, a 7.10% nominal rate compounded quarterly yields an effective annual return of 7.29%.
Important Statutory & Practical Considerations
- Tax Deduction at Source (TDS): Bank FD interest is fully taxable at your applicable income tax slab rate. Banks deduct 10% TDS under Section 194A if total interest exceeds ₹40,000/year (₹50,000 for senior citizens).
- Premature Withdrawal Penalty: Breaking an FD before maturity generally incurs a 0.50%–1.00% penalty on the contracted rate.
- Inflation Drag: After adjusting for income tax and inflation, real post-tax returns on FDs can sometimes be minimal or slightly negative.
Frequently Asked Questions
How often do Indian banks compound FD interest?
As per RBI Master Directions, Indian commercial banks compound term deposit interest once every calendar quarter (every 3 months), unless an investor explicitly selects a monthly or quarterly payout non-cumulative scheme.
What is DICGC deposit insurance coverage?
DICGC (a wholly-owned subsidiary of RBI) insures bank deposits including FDs, RDs, and savings balances up to a maximum limit of ₹5 Lakhs per individual depositor across all accounts in a single insured bank.
How can I avoid TDS on my Fixed Deposit?
If your total taxable income is below the basic tax exemption limit, you can submit Form 15G (for individuals below 60) or Form 15H (for senior citizens) to your bank at the beginning of each financial year to request zero TDS deduction.
What is the penalty for premature withdrawal of a bank Fixed Deposit?
Most Indian commercial banks levy a premature withdrawal penalty of 0.50% to 1.00% on the applicable interest rate for the period the deposit was actually held, reducing your effective return.
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