A Fixed Deposit (FD) is a financial instrument provided by banks where you deposit money for a fixed period at a predetermined interest rate. Unlike savings accounts, FDs offer higher interest rates but require you to lock your money for a specific tenure. They are considered low-risk investments that provide guaranteed returns.

Fixed Deposit interest is calculated using compound interest formula: A = P(1 + r/n)^(nt), where A is the maturity amount, P is the principal amount, r is the annual interest rate (in decimal), n is the number of times interest is compounded per year, and t is the time period in years. Different banks may compound interest at different frequencies like monthly, quarterly, half-yearly, or yearly.

FD interest rates in India are influenced by several factors including the RBI's monetary policy (repo rate), bank's liquidity position, inflation rate, deposit tenure, and deposit amount. Banks typically offer higher interest rates for longer tenures and may have special rates for various deposit amounts.

Interest earned on Fixed Deposits in India is fully taxable as per your income tax slab rate. TDS is deducted at 10% if interest exceeds ₹40,000 per year. However, you can submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.

In cumulative FDs, interest is compounded and paid at maturity along with the principal amount. This results in higher returns due to the interest-on-interest effect. In non-cumulative FDs, interest is paid out periodically (monthly, quarterly, half-yearly, or annually) as per your choice, providing regular income. Cumulative FDs are better for wealth creation, while non-cumulative ones are suitable for those needing regular income.

Yes, most banks allow premature withdrawal of FDs, but it comes with penalties (typically 0.5-1% lower interest rate). Some banks also offer loan facilities against FDs (up to 90% of the deposit amount) at 1-2% higher than the FD interest rate, which can be a better option than premature withdrawal. Some banks also offer sweep-in facilities that automatically transfer excess amounts from your savings account to FDs.

Bank FDs are offered by banks and are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakhs per depositor. Corporate FDs are issued by companies and typically offer 1-3% higher interest rates but come with higher risk as they are not insured by DICGC. The safety of corporate FDs depends on the company's credit rating, with higher-rated companies offering more secure investments.

Compound interest is almost always better for investors as it calculates interest on the initial principal and also on the accumulated interest, leading to higher returns over time. The more frequent the compounding (e.g., monthly vs. yearly), the higher the effective yield. For long-term deposits, the difference between simple and compound interest can be substantial. Simple interest may only be preferable if you need regular interest payouts for income.

As of April 2025, small finance banks offer the highest FD rates in India: Jana Small Finance Bank (8.0% for 3 years), Ujjivan Small Finance Bank (7.8%), and AU Small Finance Bank (7.5%). Among major banks, IndusInd Bank leads with 7.25%, followed by Yes Bank at 7.0%. Public sector banks like SBI offer more conservative rates (5.5-6%). Senior citizens typically get an additional 0.5% across all banks. Our calculator compares returns across these different rates.

A ₹1 lakh FD for 5 years will grow to approximately ₹1.39 lakhs at 6.5% interest with quarterly compounding, ₹1.43 lakhs at 7% interest, and ₹1.48 lakhs at 7.5% interest. The exact amount depends on your bank's interest rate and compounding frequency. Senior citizens would earn about ₹3,000-5,000 more on this amount. Our FD calculator instantly computes these values for different scenarios.

Senior citizens typically receive 0.25% to 0.5% higher FD interest rates than regular customers. In 2025, top rates for seniors include: SBI (6.0-6.5%), HDFC Bank (6.25-7.0%), ICICI Bank (6.25-6.75%), and Small Finance Banks (up to 8.5%). For example, a 3-year FD offering 7% to regular customers would typically offer 7.5% to seniors. Our calculator includes this senior citizen bonus option for accurate calculations.

To calculate monthly FD interest payout: 1) Choose a non-cumulative FD with monthly payout option, 2) Use the formula: Monthly Interest = Principal × (Annual Rate/12). For example, on a ₹10 lakh FD at 6% annual interest, you'll receive ₹5,000 per month (₹10,00,000 × 0.06/12). Note that the principal remains unchanged throughout the tenure. Our calculator offers a monthly payout option to determine your potential monthly income.

For 3-year investments, FDs offer guaranteed returns (6-7.5% in 2025) with capital safety, while equity mutual funds have provided higher historical returns (10-12%) but with market risk. Debt mutual funds typically offer similar returns to FDs (6-7%) but with better tax efficiency for higher tax brackets. FDs are better if you prioritize safety and guaranteed returns, while mutual funds suit those seeking potentially higher returns with some risk tolerance.

As of April 2025, HDFC offers slightly higher FD rates (6.0-7.0%) compared to SBI (5.5-6.5%) and ICICI (5.75-6.75%) for most tenures. For a ₹1 lakh deposit for 2 years, HDFC would give approximately ₹1,14,500, ICICI would give ₹1,14,000, and SBI would give ₹1,13,300. Our calculator lets you compare these rates side-by-side to find the best returns for your specific deposit amount and tenure.

For 1-year FDs in April 2025, the highest rates are offered by: Small Finance Banks (7.25-7.5%), IndusInd Bank (7.0%), RBL Bank (6.8%), Yes Bank (6.75%), and DCB Bank (6.7%). Among large banks, HDFC Bank offers 6.5%, while SBI and ICICI Bank offer 6.0-6.25%. For a ₹1 lakh deposit, choosing the highest rate (7.5% vs 6.0%) means approximately ₹1,500 more in returns. Our calculator helps identify these differences.

Tax-saving FDs or 5-year Tax Saver FDs offer Section 80C tax deduction up to ₹1.5 lakhs. They have a mandatory 5-year lock-in with no premature withdrawal option. Current interest rates range from 6.5-7% (April 2025). Senior Citizen Savings Scheme (SCSS) is another tax-saving option with 7.6% interest rate, ₹30 lakh investment limit, and quarterly interest payouts. Both provide tax deductions but interest earned remains taxable as per your income slab.

FD laddering involves creating multiple FDs with staggered maturities. Use our calculator to plan your ladder: 1) Divide your total amount into equal parts (e.g., 5 parts), 2) Create FDs with different tenures (e.g., 1, 2, 3, 4, and 5 years), 3) When the shortest FD matures, reinvest it for the longest term. This strategy provides liquidity while maximizing returns. For example, a ₹5 lakh investment can be split into five ₹1 lakh FDs with different maturities.

Flexi FDs (also called sweep-in FDs) combine the liquidity of savings accounts with higher FD returns. They automatically transfer excess funds from your savings account to FDs and back when needed. To calculate returns: 1) Determine your average monthly balance, 2) Subtract your required minimum balance, 3) Calculate interest on the remainder at FD rates. Our calculator can help estimate these returns by using the standard FD calculation for the portion that stays invested.

To earn ₹50,000 monthly interest from FDs, you need to invest approximately: ₹1 crore at 6% annual interest, ₹85.7 lakhs at 7% interest, or ₹75 lakhs at 8% interest. The calculation uses the formula: Principal = (Monthly Income × 12) ÷ Interest Rate. Choose a non-cumulative FD with monthly payout option. Our calculator helps determine the exact investment needed based on current bank interest rates to achieve your desired monthly income.

Post Office Term Deposits (2025 rates): 6.9% for 1-3 years, 7.0% for 5 years, quarterly compounding, government-backed safety, limited online access. Bank FDs: Rates vary (5.5-7.5%), flexible tenures, easy online management, insurance up to ₹5 lakhs, premature withdrawal options. For a ₹1 lakh deposit for 5 years, Post Office TD would yield approximately ₹1.43 lakhs while bank FDs might yield ₹1.35-1.48 lakhs depending on the bank and interest rate.

For quarterly compounding, use the formula: A = P(1 + r/4)^(4t), where P is principal, r is annual interest rate, and t is time in years. For example, ₹1 lakh at a 7% annual rate for 3 years with quarterly compounding gives: ₹1,00,000 × (1 + 0.07/4)^(4×3) = ₹1,23,086. This is higher than annual compounding (₹1,22,504) because interest compounds more frequently. Our calculator automatically adjusts for your selected compounding frequency.

NRE (Non-Resident External) FD interest rates are typically similar to resident FD rates but offer significant tax advantages. As of April 2025, major banks offer 5.5-7% on NRE FDs. The key benefit is that interest earned is completely tax-free in India, and both principal and interest are fully repatriable. NRO (Non-Resident Ordinary) FDs, in contrast, offer similar rates but interest is taxable with 30% TDS. Our calculator works for both resident and NRI FD calculations.

Banks typically offer higher interest rates for longer tenures. For a ₹1 lakh deposit in April 2025: 7-14 days (3-4%), 15-45 days (4-4.5%), 46-179 days (4.5-5.25%), 180-364 days (5.5-6.25%), 1-2 years (6-6.75%), 3-5 years (6.5-7%), 5+ years (6.5-7.25%). Our calculator automatically applies the appropriate rate based on your selected tenure, showing how longer terms generally increase your returns through both higher rates and compounding effects.

FD calculator computes returns on a one-time lump sum deposit, while RD calculator determines growth from regular monthly deposits. For example, a ₹1 lakh FD at 6.5% for 5 years yields about ₹1.39 lakhs, whereas a monthly RD of ₹1,667 (same total amount over 5 years) yields approximately ₹1.16 lakhs. FDs are better for existing lump sums, while RDs help in disciplined saving. Our website offers both calculators to help you choose the right option for your financial situation.

On a ₹10 lakh FD for 1 year, you'll earn approximately: ₹65,000 at 6.5% interest, ₹70,000 at 7% interest, or ₹75,000 at 7.5% interest, assuming quarterly compounding. The final maturity value would be ₹10.65 lakhs, ₹10.70 lakhs, and ₹10.75 lakhs respectively. Senior citizens would earn about ₹5,000 more. TDS applies if interest exceeds ₹40,000. Our calculator lets you adjust these parameters to see exact returns for your chosen bank's rates.

Corporate FD rates in April 2025 are 1-3% higher than bank FDs: Bajaj Finance (7.85-8.2%), Shriram Finance (8.0-8.5%), Mahindra Finance (7.8-8.0%), and HDFC Ltd (7.65-7.9%). Bank FDs range from 5.5-7.5% during the same period. For a ₹1 lakh deposit for 3 years, a corporate FD at 8.2% yields approximately ₹1.27 lakhs versus ₹1.20 lakhs from a bank FD at 6.5%. This higher return comes with higher risk, as corporate FDs aren't insured by DICGC.

For retirement planning with FDs: 1) Enter your current retirement corpus as principal, 2) Choose a safe interest rate (6-6.5% for long-term planning), 3) Set your retirement timeframe, 4) See the projected amount at retirement. For regular income post-retirement, calculate how much principal you need for your desired monthly income. For example, to generate ₹30,000 monthly at 7% interest, you'd need approximately ₹51.4 lakhs in FDs. Our calculator helps visualize both corpus growth and income generation phases.

The minimum amount required to open an FD in SBI is ₹1,000 for tenures up to 179 days and ₹1,000 for tenures of 180 days and above. HDFC Bank requires a minimum of ₹5,000, ICICI Bank ₹10,000, and Axis Bank ₹5,000. Small finance banks often accept FDs starting from ₹1,000. Our calculator works accurately regardless of your deposit amount, helping you calculate returns even for smaller investments that can grow substantially over time.

Once your FD is booked, the interest rate remains fixed for the entire term regardless of market changes. If rates increase after your booking, your FD continues at the original lower rate. If rates decrease, you benefit from your locked-in higher rate. To take advantage of rising rates, consider the FD laddering strategy or shorter-term deposits that you can renew at higher rates. Our calculator helps you compare different strategies under various interest rate scenarios.

TDS on FD interest is deducted at 10% if your total interest from all FDs in a bank exceeds ₹40,000 per year (₹50,000 for senior citizens). Calculate it as: TDS = Total Annual Interest × 10%. For example, if you earn ₹60,000 interest annually, TDS would be ₹6,000. You can avoid TDS by submitting Form 15G/15H if your total income is below the taxable limit. Our calculator helps estimate your potential interest earnings to plan for tax implications.