What is a Fixed Deposit (FD)?
A Fixed Deposit is a financial instrument that offers a fixed rate of interest on your money for a predetermined period. Banks and financial institutions offer FDs with guaranteed returns, making them a safe investment option for risk-averse investors.
When you invest in an FD, your money is locked in for a specific tenure (period), and you receive interest either periodically or at maturity. The returns depend on the principal amount, interest rate, and tenure.
Enter FD Details
Your FD Returns
Principal vs Interest Breakdown
How FD Returns are Calculated
Fixed Deposit returns are calculated using the compound interest formula:
A = P × (1 + r/n)^(nt)
A = Maturity Amount
The total amount you receive at the end of the tenure.
P = Principal
The initial amount you invest in the FD.
r = Interest Rate
Annual interest rate expressed as a decimal (e.g., 6.5% = 0.065).
n = Compounding Frequency
Number of times interest is compounded per year (Quarterly = 4, Half-Yearly = 2, Annually = 1, Monthly = 12).
t = Time Period
Duration of the FD in years.
Interest Earned = Maturity Amount − Principal
Benefits of Fixed Deposits
Safe & Secure
FDs are one of the safest investment options. Your principal and interest are guaranteed by the bank or financial institution.
Fixed Returns
You know exactly how much you'll earn at the end of the tenure, making it easier to plan finances.
No Market Risk
Unlike stocks or mutual funds, FD returns are not affected by market fluctuations.
Flexible Tenure
Choose from various tenure options ranging from a few months to several years.
DEPOSIT Protection
In India, deposits up to ₹5 lakhs are protected by DICGC (Deposit Insurance and Credit Guarantee Corporation).
Frequently Asked Questions
The minimum amount varies by bank and financial institution, typically ranging from ₹1,000 to ₹10,000. Most banks offer FDs starting from ₹5,000 or ₹10,000.
Yes, most banks allow premature withdrawal, but you may face a penalty. The penalty varies from 0.5% to 1% of the interest, or you may lose a portion of the interest earned.
Simple interest is calculated only on the principal amount, while compound interest is calculated on both the principal and accumulated interest. Most FDs use compound interest, which results in higher returns.
Yes, FD interest is fully taxable as per your income tax slab. Tax is deducted at source (TDS) if the interest exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).
When your FD matures, you can either withdraw the maturity amount or automatically renew the FD. Many banks offer auto-renewal, so check your FD terms to see if this applies to yours.
FD rates vary by bank and change frequently based on market conditions. Public sector banks typically offer lower rates, while private sector banks and small finance banks often offer competitive rates. Compare rates before opening an FD.
Yes, most banks allow loans against FDs. You can borrow up to 80-90% of your FD value at an interest rate slightly higher than your FD rate, keeping your investment intact.
Disclaimer
This Fixed Deposit Calculator provides estimates based on the data entered and assumes consistent interest rates. Actual returns may vary depending on bank policies, compounding frequency, and other factors. This calculator is for educational purposes only and not financial advice. Interest rates change over time, and penalties apply for premature withdrawal. Always consult with your bank or financial advisor before making investment decisions.