FD Calculation Parameters

₹1,000 ₹1 Cr
%
3% 15%
Current best FD rates: SBI 7.0%, HDFC 7.25%, ICICI 7.2%, Post Office 7.1%
Years
7 Days 20 Years

FD Analysis Results

Total Maturity Value
₹143,562
Calculated on: January 29, 2026
Principal Amount ₹100,000
Total Interest Earned ₹43,562
Annual Effective Yield 7.71%
Total TDS Deducted (10%) ₹4,356
Post-Tax Returns ₹39,206

Investment Insight

Your FD investment of ₹100,000 will grow to ₹143,562 in 5 years with quarterly compounding at 7.5% p.a.

Consider comparing with Mutual Fund SIP for potentially higher returns with moderate risk.

Bank FD Rates Comparison

Bank General FD Rate Senior Citizen 5-Year Special
SBI 7.0% 7.5% 7.2%
HDFC Bank 7.25% 7.75% 7.5%
ICICI Bank 7.2% 7.7% 7.4%
Post Office 7.1% 7.6% 7.3%
Axis Bank 7.15% 7.65% 7.35%

Real-World FD Use Cases 2026

Education Fund Planning

Mr. Sharma invests ₹5,00,000 in a 10-year FD at 7.5% for his daughter's engineering education. With quarterly compounding:

Initial Investment: ₹5,00,000
Maturity Value (2036): ₹10,52,621

Insight: FD provides guaranteed returns perfect for time-bound education goals.

Retirement Corpus Building

Mrs. Gupta, 55, allocates ₹20,00,000 to senior citizen FD at 8% for 5 years to supplement retirement income:

Monthly Interest: ₹13,333
Annual Taxable Interest: ₹1,60,000

Insight: Senior citizen FDs offer higher rates and regular income for retirees.

Tax Saving Strategy

Corporate executive uses 5-year tax-saving FD under Section 80C to save ₹1.5L annually while earning guaranteed returns:

Tax Deduction (30% bracket): ₹46,800 saved
5-Year FD Returns (7.5%): ₹2,17,811 maturity

Insight: Combines tax savings with capital preservation for conservative investors.

FD Interest Calculation Formula

Fixed Deposit interest is calculated using the compound interest formula, which accounts for the effect of compounding where interest earns additional interest over time. The standard FD calculation formula used by all major banks and financial institutions is:

Compound Interest Formula for FD

A = P × (1 + r/n)^(n×t)
A
Maturity amount (Principal + Interest)
P
Principal investment amount
r
Annual interest rate (decimal form, e.g., 7.5% = 0.075)
n
Compounding frequency per year (Quarterly = 4, Monthly = 12)
t
Time in years

Real Calculation Example

Let's calculate a ₹1,00,000 FD at 7.5% interest for 5 years with quarterly compounding:

Step 1: Convert parameters

P = ₹100,000
r = 7.5% = 0.075
n = 4 (quarterly compounding)
t = 5 years

Step 2: Apply formula

A = 100000 × (1 + 0.075/4)^(4×5)
A = 100000 × (1 + 0.01875)^(20)
A = 100000 × (1.01875)^20
A = 100000 × 1.43562
A = ₹143,562

Step 3: Calculate interest earned

Total Interest = A - P = ₹143,562 - ₹100,000 = ₹43,562

Important Note on TDS

Banks deduct 10% TDS (Tax Deducted at Source) if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). For the above example with ₹43,562 interest, TDS would be ₹4,356. The actual post-tax return would be ₹39,206.

FD Calculator FAQs 2026

How is FD interest calculated in 2026?

FD interest in 2026 is calculated using the compound interest formula: A = P(1 + r/n)^(nt). Most banks use quarterly compounding (n=4). For example, a ₹1 lakh FD at 7.5% for 5 years with quarterly compounding yields ₹1,43,562.

Senior citizens receive an additional 0.5-0.75% interest across all major banks including SBI, HDFC, and ICICI. The exact rate depends on the tenure and amount, with special rates for 5-year tax-saving FDs.

What is the best FD rate for senior citizens in 2026?

In 2026, senior citizen FD rates range from 7.5% to 8.25% depending on the bank and tenure:

  • HDFC Bank: 7.75% for 5-year FDs
  • SBI: 7.5% across most tenures
  • Small Finance Banks: Up to 8.25% for senior citizens
  • Post Office: 7.6% with government backing

Rates are subject to change based on RBI monetary policy and market conditions. Compare using our FD Calculator for real-time analysis.

How much TDS is deducted from FD interest?

Banks deduct 10% TDS if annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). Key points:

  • If PAN is not provided, TDS rate is 20%
  • You can submit Form 15G (for individuals) or 15H (for senior citizens) to avoid TDS if total income is below taxable limit
  • TDS is deducted each quarter when interest is credited
  • You can claim credit for TDS while filing income tax returns

Our calculator automatically computes TDS to show your post-tax returns accurately.

Can I break my FD before maturity in 2026?

Yes, but with conditions:

  • Premature withdrawal penalty: 0.5-1% lower interest than contracted rate
  • Tax-saving FDs: 5-year lock-in, cannot be broken (but loan against FD possible)
  • Senior citizen FDs: Usually allow premature withdrawal without penalty in medical emergencies
  • Alternative: Take loan against FD at 1-2% above FD rate instead of breaking

Check our Loan Against FD Calculator for detailed analysis.

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

The main differences are:

Feature Cumulative FD Non-Cumulative FD
Interest Payment Lump sum at maturity Monthly/Quarterly payouts
Returns Higher due to compounding Lower as interest is paid out
Best For Long-term wealth creation Regular income needs
Tax Efficiency Tax deferral possible Annual tax on interest
Are corporate FDs safer than bank FDs?

Bank FDs are generally safer for these reasons:

  • Bank FDs up to ₹5 lakhs are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation)
  • Banks are regulated by RBI with strict capital adequacy requirements
  • Corporate FDs offer higher rates (8-9%) but carry higher credit risk
  • AAA-rated corporate FDs from reputable companies like HDFC Ltd, L&T Finance are relatively safe
  • Always check credit rating before investing in corporate FDs

Use our Risk Assessment Calculator to evaluate investment safety.

How do I choose between FD and mutual funds?

Choose based on your financial goals, risk tolerance, and time horizon:

Fixed Deposits

  • Guanteed returns (7-8%)
  • Capital protection
  • Low risk
  • Predictable income
  • Best for: Emergency funds, short-term goals (1-3 years)

Mutual Funds

  • Market-linked returns (12-15%)
  • Capital appreciation
  • Higher risk
  • Tax efficiency (LTCG)
  • Best for: Long-term goals (5+ years), wealth creation

Compare using our SIP vs FD Calculator for detailed analysis.

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Last Updated: January 29, 2026 | FD rates updated in real-time from 400+ banks

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