Fixed Deposit (FD) Calculator
Calculate the maturity amount and interest earned on your Fixed Deposit, assuming standard quarterly compounding.
Understanding Fixed Deposits (FD)
What is a Fixed Deposit (FD)?
A Fixed Deposit (FD) is a financial instrument provided by banks and NBFCs where you can deposit a sum of money for a fixed period (tenure) at a pre-determined rate of interest. It is considered one of the safest investment options in India, offering guaranteed returns.
How is FD Interest Calculated?
The interest on an FD is typically compounded. This means the interest earned in one period is added to the principal, and this new, larger principal earns interest in the next period. This "interest on interest" effect is what helps your money grow faster.
- Formula: The formula for compound interest is:
A = P * (1 + r/n)^(n*t) - A = Maturity Value
- P = Principal Amount (your investment)
- r = Annual Interest Rate (as a decimal)
- n = Number of times interest is compounded per year (e.g., 4 for quarterly)
- t = Tenure (in years)
Most banks in India offer quarterly compounding (n=4), which is the assumption used in this calculator.
A Note on Tax (TDS)
It's important to remember that the interest earned on an FD is taxable as per your income tax slab. Banks are required to deduct Tax at Source (TDS) if your total interest income from all FDs with them exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). The final maturity amount shown by the calculator is pre-tax.
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