Fixed Deposits (FD) and Recurring Deposits (RD) remain India's most popular savings instruments — over ₹200 lakh crore is held in bank deposits. Understanding how maturity amounts are calculated, comparing rates across banks, and knowing the tax implications helps you maximise returns.
Calculate FD & RD Maturity Instantly
Enter amount, rate, and tenure. See maturity amount, interest earned, and year-by-year growth.
How FD Maturity Amount Is Calculated
Indian banks compound FD interest quarterly:
Maturity = P × (1 + r/4)^(4×t)
P = Principal, r = Annual rate (decimal), t = YearsExample: ₹5,00,000 FD at 7.5% for 3 years
Maturity = 5,00,000 × (1 + 0.075/4)^(4×3) = 5,00,000 × (1.01875)^12 = ₹6,25,226
Interest earned: ₹1,25,226. Simple interest would be ₹1,12,500 — quarterly compounding adds ₹12,726 extra.
How RD Maturity Amount Is Calculated
RD interest is calculated on each monthly deposit separately, compounded quarterly:
Maturity = R × [(1+r/4)^(4×t) - 1] / [1-(1+r/4)^(-1/3)]Example: ₹10,000/month RD at 7% for 3 years
Total deposited: ₹3,60,000 | Maturity: ~₹4,07,810 | Interest: ₹47,810
Top Bank FD Interest Rates (2026)
| Bank | 1 Year | 3 Years | 5 Years | Senior Citizen |
|---|---|---|---|---|
| SBI | 6.80% | 7.00% | 6.50% | +0.50% |
| HDFC Bank | 6.60% | 7.10% | 7.00% | +0.50% |
| ICICI Bank | 6.70% | 7.10% | 7.00% | +0.50% |
| Post Office | 6.90% | 7.10% | 7.50% | — |
| Small Finance Banks | 7.5-8.5% | 7.5-8.0% | 7.5-8.0% | +0.50% |
Banks like AU, Equitas, Ujjivan offer 0.5-1.5% higher FD rates than large banks. Deposits up to ₹5 lakh are insured by DICGC regardless of bank size — so the risk is limited for amounts within insurance cover.
TDS on FD Interest in India
| Condition | TDS Rate |
|---|---|
| Interest < ₹40,000/year (₹50,000 for seniors) | No TDS |
| Interest > threshold, PAN provided | 10% |
| Interest > threshold, no PAN | 20% |
| Form 15G/15H submitted (income below taxable) | No TDS |
TDS is deducted by the bank but FD interest is fully taxable at your income slab rate. TDS is just advance tax — you still owe the difference at filing time.
A 7.5% FD for someone in 30% tax bracket yields only 5.25% after tax. Compare with PPF (7.1%, fully tax-free) — PPF actually gives better post-tax returns despite a lower stated rate.
FD vs RD vs PPF vs Debt Funds: Complete Comparison
| Feature | FD | RD | PPF | Debt Mutual Fund |
|---|---|---|---|---|
| Investment type | Lump sum | Monthly | Yearly (max ₹1.5L) | Lump sum / SIP |
| Rate (2026) | 6.5-8.5% | 6.5-7.5% | 7.1% | 7-9% (historical) |
| Lock-in | Flexible (7 days to 10 years) | 6 months to 10 years | 15 years | None |
| Tax on returns | Slab rate (fully taxable) | Slab rate | Tax-free (EEE) | Slab rate |
| 80C deduction | Only 5-year tax-saver FD | No | Yes (₹1.5L limit) | No (ELSS does) |
| Premature withdrawal | Yes (0.5-1% penalty) | Yes (penalty) | Partial after 7 years | Anytime (exit load if < 1 year) |
| DICGC insurance | Up to ₹5L | Up to ₹5L | Government backed | Market-linked, no insurance |
For someone in the 30% tax bracket: FD at 7.5% → post-tax 5.25%. PPF at 7.1% → post-tax 7.1% (fully exempt). PPF wins despite lower stated rate. For 0% tax bracket (income below ₹5L): FD wins because rates are higher and lock-in is shorter.
Smart FD Strategies for Maximum Returns
FD Laddering
Instead of one large FD, split into multiple FDs with staggered maturities (1 year, 2 years, 3 years). Benefits: better liquidity (one FD matures each year), catches rate changes, and you never break a large FD prematurely.
Senior Citizen Advantage
Senior citizens (60+) get 0.25-0.50% extra on FD rates at most banks. On ₹10L, that is ₹2,500-5,000 extra per year. Also get higher TDS threshold (₹50,000 vs ₹40,000).
Tax-Saver FD (Section 80C)
5-year tax-saver FDs qualify for ₹1.5L deduction under Section 80C. However, the interest is still fully taxable. Compare with ELSS (equity-linked savings) which has only 3-year lock-in and potentially higher returns.
Sweep-in FD
Savings account balance above a threshold auto-converts to FD. Earns FD rates while maintaining savings account liquidity. Available at most major banks — ask your bank to enable it.
How to Use the Tool (Step by Step)
- 1
Open the Calculator
Navigate to FD/RD Calculator on ToolsArena.
- 2
Choose FD or RD
Select Fixed Deposit or Recurring Deposit mode.
- 3
Enter Details
Fill in amount, interest rate, and tenure.
- 4
View Maturity
See maturity amount, total interest, and year-by-year breakdown.
Frequently Asked Questions
How is FD interest calculated in India?+−
Indian banks compound FD interest quarterly. Formula: Maturity = P × (1 + r/4)^(4×t). This gives slightly higher returns than simple interest due to quarterly compounding.
What is the TDS limit on FD interest?+−
₹40,000 per year (₹50,000 for senior citizens). Above this, bank deducts 10% TDS if PAN is provided. Submit Form 15G/15H if your total income is below taxable limit to avoid TDS.
Is FD interest fully taxable?+−
Yes. FD interest is added to your income and taxed at your slab rate (5%, 20%, or 30%). TDS is just advance tax deducted by the bank — you may owe more at filing time.
FD vs PPF — which is better?+−
For most taxpayers in 20-30% bracket, PPF (7.1%, tax-free) beats FD (7.5%, taxable at slab). After tax, a 7.5% FD yields only 5.25-6% while PPF gives full 7.1%. PPF wins on post-tax returns.
Are small finance bank FDs safe?+−
Deposits up to ₹5 lakh per bank are insured by DICGC (Deposit Insurance) regardless of bank size. For amounts within this limit, the risk is comparable to large banks while rates are 0.5-1.5% higher.
What is the penalty for breaking an FD early?+−
Most banks charge 0.5-1% lower interest rate than the applicable rate for the period the FD was held. Some banks also charge a flat penalty. Always check your bank's specific policy.
Is this calculator accurate?+−
Yes, using standard quarterly compounding as per RBI guidelines. Actual maturity may vary slightly based on the bank's specific calculation method and day-count convention.
Is this calculator free and private?+−
Yes. Runs in your browser. No financial data sent to any server.
Calculate FD & RD Maturity Instantly
Enter amount, rate, and tenure. See maturity amount, interest earned, and year-by-year growth.
Open FD/RD Calculator →Related Guides
Compound Interest Calculator Guide
Understand compound interest with the CI formula, worked examples in INR, comparison with simple interest, and real-world applications for FD, SIP, PPF, and loans.
SIP Calculator Guide
SIP formula, return tables, India mutual fund comparison, and step-by-step investing guide.
EMI Calculator Guide
Understand the EMI formula, read an amortisation schedule, compare home/car/personal loan rates, and make smarter borrowing decisions.