Fixed Deposit Details
FD Result
FD interest is taxable as per your income tax slab. Banks may deduct TDS where applicable. Actual tax impact may vary based on total income and deductions.
How Fixed Deposit (FD) Returns Are Calculated
A Fixed Deposit (FD) is a low-risk investment offered by banks and post offices, where a lump sum amount is deposited for a fixed tenure at a predetermined interest rate. FD returns are predictable and not linked to market performance.
How FD Interest Works
- Interest is typically compounded quarterly in Indian banks
- The interest rate is fixed at the time of investment and remains unchanged
- Senior citizens usually receive an additional interest (commonly 0.25%–0.75%)
- Longer tenure leads to higher compounding benefits
FD Calculation Method
Banks calculate FD maturity using compound interest:
Maturity Amount = P × (1 + r/n)n × t
where P is the principal amount, r is the annual interest rate, n is the compounding frequency (quarterly), and t is the tenure in years.
What Affects Your FD Returns?
- Deposit amount: Higher principal results in higher interest
- Interest rate: Even a small rate difference impacts long-term returns
- Tenure: Longer tenure allows interest to compound more times
- Senior citizen benefits: Extra returns for eligible investors
Taxation & Other Important Points
- Interest earned on FD is fully taxable as per income tax slab
- Banks may deduct TDS if interest exceeds the prescribed limit
- Premature withdrawal may lead to reduced interest or penalties
- Some FDs offer monthly or quarterly interest payout instead of maturity payout
This FD calculator provides an estimate based on standard bank compounding practices. Actual maturity value may vary slightly depending on bank policies and applicable taxes.