Free FD Calculator — Fixed Deposit Maturity & Interest
November 3, 2026 · 3 min read · By the DollarWise team
How it works
A fixed deposit (FD) locks in a lump sum at a fixed annual interest rate for a chosen period, with interest compounded at a set frequency — usually quarterly in India. Enter your principal, the FD rate, the tenure in years and months, and how often interest compounds — this calculator applies the standard compound-interest formula and shows your maturity value, total interest earned and the effective annual yield.
## How the math works
A fixed deposit uses the standard compound interest formula. The annual rate is split across each compounding period, and interest is added that many times a year, so the balance grows slightly faster than simple interest:
**A = P × (1 + r/n)^(n × t)**
- **P** = principal (lump sum deposited)
- **r** = annual interest rate (as a decimal)
- **n** = compounding periods per year (12 monthly, 4 quarterly, 2 half-yearly, 1 yearly)
- **t** = tenure in years
"Total interest" is maturity minus principal. The "effective annual yield" is what the compounding frequency actually delivers per year — it is always slightly above the nominal rate, and the gap widens the more often interest compounds.
## Everyday uses
- **Bank shopping:** compare the same ₹1 lakh at 6.8% quarterly at one bank versus 7% yearly at another — effective yield tells you which really pays more.
- **Goal planning:** see how much you need to deposit today to hit a target (tuition, down payment) in N years at the current FD rate.
- **Cumulative vs payout:** decide whether to reinvest interest (compounding, higher maturity) or take monthly/quarterly payouts (income stream, lower final amount).
## Frequently asked questions
### Which compounding frequency do Indian banks use for FDs?
Most banks compound interest quarterly for cumulative FDs. Some offer monthly or quarterly interest payout options where interest is paid out rather than reinvested, so it does not compound. Always check the schedule — a "7% per annum" FD with annual compounding pays less at maturity than one with quarterly compounding.
### Is FD interest taxable?
Yes. FD interest is added to your income and taxed at your slab rate. Banks deduct TDS at 10% (20% without PAN) if interest exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). Submit Form 15G/15H if your total income is below the taxable limit to avoid TDS.
### What happens if I break my FD early?
You can withdraw prematurely, but the bank usually pays 0.5–1% less than the rate applicable for the actual tenure you held it, and some FDs (tax-saving FDs under Section 80C) have a mandatory 5-year lock-in with no premature withdrawal.