Fixed Deposit Calculator
Calculate your Fixed Deposit returns with different tenure categories and payout options. Get accurate projections with real-time updates.
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Key Insights
Enter your FD details to see your investment projection
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Short-term FD
- Simple interest calculation
- Maximum liquidity (≤ 180 days)
- Lower interest rates
- Ideal for parking surplus funds
Regular FD
- Quarterly compounding
- 6 months to 10 years tenure
- Multiple payout options
- Standard market rates
Long-term FD
- Highest interest rates
- Tax-saving options (Section 80C)
- Best for wealth building
- Compound growth advantage
Frequently Asked Questions
Q: How is FD interest calculated - simple vs compound interest?
Simple interest is calculated only on the principal amount: Interest = Principal × Rate × Time. Compound interest is calculated on principal plus accumulated interest, reinvesting interest at regular intervals. For example, ₹1 lakh at 7% for 3 years yields ₹21,000 with simple interest but ₹22,504 with annual compounding. Most bank FDs use compound interest, significantly boosting returns over time.
Q: What's the difference between quarterly and monthly compounding?
Compounding frequency affects returns - more frequent compounding means higher returns. With quarterly compounding, interest is added 4 times yearly; monthly means 12 times. For ₹1 lakh at 7% annually: quarterly compounding gives ₹22,504, while monthly gives ₹23,367 after 3 years. The difference increases with higher amounts and longer tenures. Always choose monthly/quarterly compounding over annual when available.
Q: How is tax deducted on FD interest and what are TDS rules?
FD interest is fully taxable as per your income tax slab. Banks deduct 10% TDS if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). If you have no tax liability, submit Form 15G/15H to prevent TDS. TDS rate is 20% if you don't provide PAN. Remember to include FD interest in your ITR even if no TDS was deducted.
Q: How do FDs compare to other safe investment options?
Bank FDs offer 6-7.5% with capital guarantee and deposit insurance up to ₹5 lakh. Post Office schemes offer slightly higher rates (7-7.5%) with sovereign guarantee. Debt mutual funds offer potentially higher returns but without capital guarantee. RBI bonds give 7-8% with sovereign backing but longer lock-in. PPF offers 7.1% with tax benefits and 15-year lock-in. Choose based on your liquidity needs, risk tolerance, and tax situation.
Q: What are the penalties for premature withdrawal of FD?
Most banks charge 0.5-1% penalty on the applicable interest rate for premature FD withdrawal. Some banks don't allow withdrawal before a minimum period (usually 7 days to 3 months). You'll receive interest at the rate applicable for the actual period held, minus penalty. Tax-saver FDs have a mandatory 5-year lock-in with no premature withdrawal allowed. Always check bank's specific penalty terms before investing.
Q: Do senior citizens get higher FD interest rates?
Yes, most banks offer 0.25-0.50% additional interest to senior citizens (60+ years) on FDs. This applies across all tenures and compounding frequencies. Senior Citizen Savings Scheme (SCSS) offers even higher rates around 8.2% with quarterly payouts and tax benefits under 80C. The higher TDS threshold of ₹50,000 for seniors also helps. These benefits make FDs particularly attractive for retirees seeking safe, regular income.
Q: What are the risks of corporate FDs vs bank FDs?
Corporate FDs offer 1-3% higher interest but carry credit risk - the company could default. Bank FDs have ₹5 lakh deposit insurance from DICGC, making them safer. Corporate FDs are not insured and depend entirely on company's financial health. Check credit ratings (AAA is safest, below AA is risky) before investing. Stick to highly-rated companies or PSUs for corporate FDs. For amounts under ₹5 lakh, bank FDs are safer.
Q: What is FD laddering strategy and how does it work?
FD laddering means splitting your corpus into multiple FDs with different maturity dates instead of one large FD. For example, divide ₹5 lakh into five ₹1 lakh FDs maturing in 1, 2, 3, 4, and 5 years. This provides regular liquidity, reduces reinvestment risk, and lets you benefit from changing interest rates. As each FD matures, reinvest at current rates. This strategy balances liquidity needs with optimal returns.