How to Use the FD Calculator
Enter principal, interest rate, and tenure. Choose cumulative or monthly payout FD. The calculator shows maturity amount, interest earned, and post-tax returns.
FD Calculator Formula
A = P × (1 + r/4)^(4n)r= Annual rate (decimal)n= Tenure in years
Example Calculation
₹5 lakh FD at 7% for 3 years (cumulative):
A = 500000 × (1 + 0.07/4)^12 = 500000 × 1.2314
Maturity ≈ ₹6,15,700; Interest ≈ ₹1,15,700
How FD Interest Is Taxed in India
The single biggest thing people miss about fixed deposits is that the advertised return is a pre-tax number. FD interest is fully taxable: it is added to your total income for the year and taxed at your income-tax slab rate. So if you fall in the 30% bracket, an FD paying 7% gives you an after-tax return of roughly 4.9% — and if inflation is running at 6%, you are actually losing purchasing power. This is why FDs are best suited to safety and short-term goals rather than long-term wealth building.
The interest is taxed every year as it accrues, even on a cumulative FD where you receive the money only at maturity. Many people are caught out by a tax bill on interest they have not yet withdrawn.
TDS on FD Interest — the ₹40,000 Threshold
Banks deduct TDS (Tax Deducted at Source) on FD interest before paying it to you. Knowing the rules prevents nasty surprises and helps you reclaim money you should not have lost.
- TDS is deducted at 10% if your total FD interest from a bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).
- If you have not given the bank your PAN, TDS jumps to 20%.
- TDS is not the final tax — it is an advance. If your slab rate is higher than 10%, you pay the balance when filing; if lower, you claim a refund.
- TDS is deducted per bank, so spreading deposits across banks can keep each below the threshold — though the interest is still fully taxable.
How to Legally Avoid or Reduce TDS
If your total income is below the taxable limit, you can stop the bank from deducting TDS by submitting Form 15G (for those under 60) or Form 15H (for senior citizens) at the start of the financial year. This is a declaration that your income is below the taxable threshold, so no TDS should apply. Submit it to every bank where you hold FDs, and renew it each year. If TDS has already been deducted but your final tax liability is lower, you reclaim the difference as a refund when you file your return — so always report FD interest and the TDS already paid (visible in your Form 26AS) when filing.
Is a Fixed Deposit Right for You?
FDs do one job well: protect capital with a guaranteed, predictable return. That makes them ideal for an emergency fund and for money you will need within one to three years, where you cannot risk a market fall. Their weaknesses are equally clear — returns barely beat inflation, the interest is fully taxable, and breaking an FD early usually costs a small penalty. For long-term goals, the after-tax, post-inflation return is often too low to build real wealth, and a mix of PPF (tax-free) and equity mutual funds typically serves better. Use this calculator to see your maturity value, then apply your slab rate to understand the real, after-tax return before committing.
Frequently Asked Questions
Is FD interest taxable?
Yes. FD interest is added to your income and taxed at your applicable slab rate. TDS is deducted at 10% if interest exceeds ₹40,000/year (₹50,000 for senior citizens).
Sources
All calculations run in your browser and are provided for information only — they are not investment, tax or legal advice. Verify current rates and rules with the official source above before acting.
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