FD Calculator
Calculate your Fixed Deposit returns instantly. Enter principal, interest rate, and tenure to get maturity value, total interest, and a complete compounding schedule.
FD Details
₹5 Lakh
Compounding Frequency
Maturity Amount
₹7.07 Lakh
5 yr · 7% · Quarterly
Principal
₹5,00,000
Total Interest
₹2,07,389
Maturity Amount
₹7,07,389
Growth — Principal + Interest per Year
Year-by-Year Breakdown
| Year | Opening Balance | Interest Earned | Closing Balance |
|---|---|---|---|
| Year 1 | ₹5,00,000 | ₹35,930 | ₹5,35,930 |
| Year 2 | ₹5,35,930 | ₹38,511 | ₹5,74,441 |
| Year 3 | ₹5,74,441 | ₹41,279 | ₹6,15,720 |
| Year 4 | ₹6,15,720 | ₹44,245 | ₹6,59,965 |
| Year 5 | ₹6,59,965 | ₹47,424 | ₹7,07,389 |
How It Works
A Fixed Deposit (FD) is a lump-sum deposit with a bank or NBFC for a fixed tenure at a predetermined interest rate. Unlike savings accounts, FDs lock in the rate for the full tenure — so your returns are predictable. Indian banks typically compound FD interest quarterly, though some offer monthly or half-yearly compounding. The more frequently interest is compounded, the higher your effective annual yield, even if the nominal rate is the same.
FD Compound Interest Formula
A = P × (1 + r/n)^(n×t) — where P is principal, r is annual rate/100, n is compounding frequency per year, and t is tenure in years.
Example: ₹5 lakh FD at 7% p.a. for 5 years with quarterly compounding — n=4, t=5. Maturity = 5,00,000 × (1 + 0.07/4)^20 ≈ ₹7,05,902. Interest earned: ₹2,05,902. EAR = (1.0175)^4 − 1 = 7.19%.
Simple interest gives ₹1,75,000 interest on the same deposit — ₹30,902 less. The difference grows larger with longer tenures, making compounding frequency a meaningful factor for multi-year FDs.
Key Terms
- P — Principal
- The lump-sum deposit amount.
- r — Annual rate
- Nominal interest rate ÷ 100. E.g., 7% → 0.07.
- n — Compounding frequency
- Times interest is compounded per year: Monthly=12, Quarterly=4, Half-yearly=2, Annual=1.
- EAR — Effective Annual Rate
- (1 + r/n)^n − 1. True annual yield after intra-year compounding.
Frequently Asked Questions
What is a Fixed Deposit?
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum with a bank or NBFC for a fixed period at a guaranteed interest rate. At maturity, you receive the principal plus accumulated interest. FDs are low-risk and offer returns higher than regular savings accounts.
Which compounding frequency gives the best returns?
Monthly compounding gives the highest returns because interest is added to principal 12 times a year, and each subsequent period earns interest on a larger base. However, the difference between monthly and quarterly is small — at 7% for 5 years, the gap is under ₹200 per lakh. Quarterly is the standard for most Indian bank FDs.
What is the effective annual rate (EAR)?
The Effective Annual Rate (EAR) is the true annual yield after accounting for compounding within the year. For a 7% FD compounded quarterly, EAR = (1 + 0.07/4)^4 − 1 = 7.19%. EAR is useful for comparing FDs across different compounding frequencies.
Is FD interest taxable in India?
Yes. FD interest is taxable as 'Income from Other Sources' at your applicable income tax slab. Banks deduct TDS at 10% when annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable limit, you can submit Form 15G/15H to avoid TDS deduction.
What is the difference between cumulative and non-cumulative FD?
In a cumulative FD, interest compounds and is paid out at maturity along with the principal — ideal for wealth building. In a non-cumulative FD, interest is paid out at regular intervals (monthly, quarterly, etc.) without compounding — suited for people who need regular income.
Can I break an FD before maturity?
Yes, most banks allow premature withdrawal, but typically charge a penalty of 0.5–1% on the applicable interest rate. Some banks offer no-penalty premature closure for specific FD schemes. The penalty reduces your effective return, so factor this in when choosing an FD tenure.