Question 1

How is FD interest calculated?

Accepted Answer

FD interest is calculated using compound interest formula A equals P times (1 plus r/n) to the power of n times t, where P is principal, r is annual rate, n is compounding frequency, and t is years. Most banks compound quarterly. Simple interest formula is P times r times t. The calculator supports both methods.

Question 2

What is the current FD interest rate in India?

Accepted Answer

FD rates in India range from 6.5 to 8 percent for general citizens and 7 to 8.5 percent for senior citizens as of 2026. Rates vary by bank tenure and deposit amount. SBI offers 6.5 to 7.1 percent while small finance banks offer up to 8.5 percent. Senior citizens typically get 0.25 to 0.5 percent extra.

Question 3

Is TDS deducted on FD interest?

Accepted Answer

Yes TDS at 10 percent is deducted if total FD interest from a bank exceeds 40000 per year or 50000 for senior citizens. If PAN is not provided TDS is deducted at 20 percent. You can submit Form 15G or 15H to avoid TDS if your total income is below the taxable limit.

Question 4

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

Accepted Answer

Cumulative FD reinvests interest and pays the total at maturity giving higher effective returns due to compounding. Non-cumulative FD pays interest periodically monthly quarterly or annually providing regular income. Cumulative gives higher maturity value while non-cumulative suits those needing regular cash flow.

Question 5

Is FD interest taxable?

Accepted Answer

Yes FD interest is fully taxable and added to your total income. It is taxed at your income tax slab rate under Income from Other Sources. TDS is deducted at 10 percent but actual tax depends on your slab. Tax-saving FDs under Section 80C have a 5 year lock-in and qualify for deduction up to 1.5 lakh.

Question 6

What is the 80C tax benefit on FD?

Accepted Answer

Tax-saving fixed deposits with 5 year lock-in qualify for deduction under Section 80C up to 1.5 lakh per year under old tax regime. The interest earned is still taxable. This benefit is not available under the new tax regime. Maximum deposit eligible is 1.5 lakh and premature withdrawal is not allowed during lock-in.

Question 7

Can senior citizens get higher FD rates?

Accepted Answer

Yes most banks offer 0.25 to 0.5 percent higher FD rates for senior citizens aged 60 plus. Some banks offer up to 0.75 percent extra for super senior citizens aged 80 plus. The TDS threshold is also higher at 50000 versus 40000 for general citizens. Section 80TTB allows deduction of up to 50000 on interest income for seniors.

Question 8

What is the penalty for premature FD withdrawal?

Accepted Answer

Premature withdrawal typically attracts a penalty of 0.5 to 1 percent reduction from the applicable interest rate. The interest is recalculated at the rate applicable for the actual holding period minus the penalty. Some banks do not charge penalty for small deposits. Tax-saving 5 year FDs cannot be withdrawn prematurely.

Question 9

How does compounding frequency affect FD returns?

Accepted Answer

Higher compounding frequency gives slightly higher effective returns. Monthly compounding yields more than quarterly which yields more than annual. For example 1 lakh at 7 percent for 5 years: annual compounding gives 40255 interest while quarterly compounding gives 41478. Most banks use quarterly compounding for cumulative FDs.

Question 10

What is Form 15G and Form 15H?

Accepted Answer

Form 15G is a self-declaration for individuals below 60 whose total income is below the taxable limit to request the bank not to deduct TDS on FD interest. Form 15H is the same declaration for senior citizens aged 60 and above. These forms must be submitted at the beginning of each financial year to each bank where you hold FDs.

Question 11

Is FD safer than mutual funds?

Accepted Answer

FDs offer guaranteed returns and principal protection making them safer than mutual funds which are subject to market risk. However FD returns often barely beat inflation after tax. A balanced approach is recommended: FDs for emergency funds and short-term goals, mutual fund SIPs for long-term wealth creation beyond 5 years.

Question 12

What is the minimum and maximum FD tenure?

Accepted Answer

Minimum FD tenure is typically 7 days and maximum is 10 years at most banks. The highest interest rates are usually offered for 1 to 3 year tenures. Tax-saving FDs have a mandatory 5 year lock-in. Shorter tenures of 7 days to 6 months have lower rates while medium tenures of 1 to 5 years offer the best rates.

Question 13

Can NRIs invest in FD in India?

Accepted Answer

Yes NRIs can invest in NRE and NRO fixed deposits in India. NRE FD interest is tax-free in India and fully repatriable. NRO FD interest is taxable in India at 30 percent plus cess with TDS deducted. NRE FDs offer slightly lower rates than domestic FDs. Tenure ranges from 1 to 10 years for both types.

Bank	1 Year	3 Years	5 Years	Senior Citizen Extra
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%	N/A
Small Finance Banks	7.50%	8.00%	8.25%	+0.50–0.75%

Parameter	General Citizen	Senior Citizen (60+)
TDS Threshold (per bank/year)	₹40,000	₹50,000
TDS Rate (with PAN)	10%	10%
TDS Rate (without PAN)	20%	20%
Sec 80TTB Deduction	N/A	Up to ₹50,000
Tax-Saving FD (80C)	₹1.5L, 5-year lock-in	₹1.5L, 5-year lock-in
TDS Avoidance	Form 15G	Form 15H

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FD Interest Calculator — Fixed Deposit Returns with TDS Impact

Calculate FD Maturity & Interest

How to Use the FD Calculator

Step 1 — Enter Deposit Details

Step 2 — Choose Compounding and Category

Step 3 — View Results

FD Interest Calculation Formulas

FD Interest Rates in India — 2026

Tax and TDS on Fixed Deposit Interest

Frequently Asked Questions — Fixed Deposits