What is the current FD interest rate in India?

In 2024-25, major banks offer 6.5-7.5% for regular FDs, and 7-8% for senior citizens. Small finance banks offer up to 9%.

Which is better — monthly or quarterly compounding?

More frequent compounding gives higher returns. Monthly compounding is marginally better than quarterly, which is better than annual compounding.

What is the difference between cumulative and non-cumulative FD?

Cumulative FD reinvests interest and pays at maturity. Non-cumulative pays interest monthly/quarterly. Cumulative gives higher maturity due to compounding.

Can I break FD before maturity?

Yes, but banks charge a 0.5-1% penalty on premature withdrawal. Some tax-saver FDs have a 5-year lock-in and cannot be broken early.

FD Calculator

Q: Is FD interest taxable?

Yes. FD interest is added to your income and taxed as per your income tax slab. TDS of 10% is deducted if annual interest exceeds ₹40,000 (₹50,000 for seniors).

Calculate your Fixed Deposit maturity amount and total interest earned. Supports monthly, quarterly, and annual compounding frequencies.

Enter FD Details

Principal Amount

₹

Annual Interest Rate

Tenure (Years)

Tenure (Months)

Compounding Frequency

Maturity Amount

₹0

Total Interest Earned

₹0

Effective Annual Rate (EAR)

0.00%

Principal vs Interest

How FD Compounding Works

Fixed Deposits in India most commonly use quarterly compounding. The formula used is:

A = P × (1 + r/n)^(n×t)

Where P is the principal, r is the annual interest rate (decimal), n is the number of compounding periods per year, and t is the tenure in years.

The Effective Annual Rate (EAR) shows the true annual return after accounting for compounding. A 7% FD compounded quarterly has an EAR of approximately 7.19%.

Want to compare FD returns with mutual fund investments? Use our SIP Calculator or CAGR Calculator. Head back to EMI Calculator for all our financial tools.

Frequently Asked Questions

In 2024-25, major banks like SBI, HDFC, and ICICI offer 6.5–7.5% for regular FDs. Senior citizens typically get 0.5% extra. Small finance banks like AU and Jana SFB offer up to 9%.

Yes. FD interest is added to your total income and taxed as per your income tax slab. TDS of 10% is deducted if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G/15H if income is below the taxable threshold.

More frequent compounding gives higher returns. Monthly compounding yields the most, followed by quarterly, then annual. However, the difference is marginal — a 7% rate gives 7.23% EAR monthly vs 7.19% quarterly.

A cumulative FD reinvests all interest and pays the full maturity amount at the end. A non-cumulative FD pays out interest monthly, quarterly, or annually. Cumulative FDs grow larger due to compounding and are better for wealth creation.

Yes, most FDs can be broken prematurely, but banks charge a 0.5–1% penalty on the applicable rate. Tax-saving FDs under Section 80C have a mandatory 5-year lock-in and cannot be broken early.