FD calculator
₹5,00,000 in a 5-year FD at 7%, compounded quarterly the way Indian banks do, matures at ₹7,07,389 — ₹2,07,389 of interest, at an effective annual rate of 7.19%. The number that actually matters, though, is what is left after tax and inflation.
Your deposit
Banks quote per tenure, and senior citizens usually get an extra 0.5%.
At maturity
What you investWhat compounding adds
| Year | Invested | Returns | Value at year end |
|---|---|---|---|
| 1 | ₹5,00,000 | ₹35,930 | ₹5,35,930 |
| 2 | ₹5,00,000 | ₹74,441 | ₹5,74,441 |
| 3 | ₹5,00,000 | ₹1,15,720 | ₹6,15,720 |
| 4 | ₹5,00,000 | ₹1,59,965 | ₹6,59,965 |
| 5 | ₹5,00,000 | ₹2,07,389 | ₹7,07,389 |
The number banks do not print on the certificate
An FD's headline rate is the least interesting thing about it. Two deductions come first.
Tax. FD interest is added to your income and taxed at your slab, every year, on accrual — you owe it even in a five-year cumulative deposit where you have not received a rupee. At a 30% slab, 7% becomes 4.90% after tax.
Inflation. Applying the real-rate relation to that post-tax figure against 6% inflation leaves -1.04% — a negative real return.
Which is the honest summary of a fixed deposit for a higher-rate taxpayer: your capital is safe in rupees and shrinking in purchasing power. That is a perfectly reasonable price for certainty over one or two years. It is a poor foundation for a twenty-year goal.
What an FD is genuinely good for
Being fair to the instrument: nothing beats an FD for money you will need at a known date inside about three years. An emergency fund, a house deposit due next year, school fees in eighteen months. Capital certainty is exactly the right requirement there, and equity is exactly the wrong tool.
The mistake is not using FDs. It is using them for horizons long enough that inflation becomes the dominant risk, and calling that choice "safe".
Before you rely on this
An estimate, not a forecast
This is arithmetic applied to assumptions you chose. Mutual funds carry market risk, returns are not guaranteed, and past performance does not indicate future results. Nothing here is personalised advice — for decisions of any size, speak to a SEBI-registered investment adviser.
Questions people actually ask
How is FD interest calculated in India?
Cumulative deposits compound quarterly at nearly all Indian banks:
M = P × (1 + r ÷ 4)4t. Non-cumulative deposits pay interest out monthly or
quarterly instead, so nothing compounds and the total is lower.
The calculator defaults to quarterly and lets you change it if your bank differs.
Is FD interest taxable?
Yes, fully, at your income tax slab, and on an accrual basis rather than when you receive it. Banks deduct TDS once interest crosses the annual threshold, but TDS is not the final liability — you settle the rest when you file.
There is no indexation and no concessional rate. This is what makes FDs unattractive for higher-rate taxpayers over long periods.
What happens if I break an FD early?
You normally receive the rate applicable to the period the deposit actually ran, minus a penalty of typically 0.5% to 1%. Both figures are bank-specific and in the terms you accepted.
The practical consequence: laddering several smaller deposits with staggered maturities beats one large one, because you can break the smallest.
Is an FD safer than a debt mutual fund?
For capital certainty, yes — bank deposits are covered by DICGC insurance up to ₹5 lakh per depositor per bank, and the rate is contractual.
Debt funds carry interest-rate and credit risk but can be more tax-efficient in some situations, though much less so since the April 2023 change removed indexation. Neither is a substitute for equity over long horizons.