FD Calculator

FD rates vary by bank and tenure. As of 2025, major public sector banks (SBI, Bank of Baroda) offer 6.5 to 7.25% for regular customers and 7 to 7.75% for senior citizens on 1 to 3 year deposits. Private sector banks (HDFC, ICICI, Kotak) typically offer 7 to 7.5%. Small Finance Banks (AU, Equitas, Ujjivan) offer 8 to 9%+. Post Office Time Deposits offer 6.9 to 7.5%, guaranteed by the Government of India. Rates are reviewed periodically based on RBI's repo rate changes. Always check your bank's official website for the most current rates before investing, as rates change without prior notice.

Yes, FD interest is fully taxable in India. It is added to your total income and taxed at your applicable income tax slab rate (5%, 10%, 15%, 20%, or 30%). Your bank deducts TDS at 10% if total interest earned across all your FDs at that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). If you are in a lower tax bracket, submit Form 15G (if below 60 years) or Form 15H (if 60+) at the start of the year to prevent TDS deduction. Note: submitting Form 15G/15H avoids TDS but does not exempt you from tax liability - you must still declare the interest income in your ITR.

In a cumulative FD, interest is compounded periodically (usually quarterly) and paid along with the principal at maturity. This maximizes wealth accumulation through compounding. In a non-cumulative FD, interest is paid out at regular intervals - monthly, quarterly, or annually - making it suitable for those who need regular income, like retirees. On ₹10 lakh at 7.5% for 3 years: a cumulative FD gives approximately ₹12.5 lakh at maturity. The non-cumulative monthly payout is about ₹6,250 per month. For investors who do not need the income for living expenses, cumulative is always better since periodic payouts typically go into a low-interest savings account and lose compounding benefit.

Yes, premature FD withdrawal is generally allowed, but it comes with a penalty. Most banks reduce the applicable interest rate by 0.5% to 1% for premature withdrawals. For example, if you opened a 3-year FD at 7.5% but break it after 1 year, the bank might pay at the 1-year rate (say 6.8%) minus a 0.5% penalty - giving you only 6.3% for the period held. Some banks (HDFC, ICICI) offer special penalty-free premature withdrawal FDs at slightly lower rates. For tax purposes, the interest earned up to the point of withdrawal is fully taxable in the year of withdrawal. If you might need funds before maturity, consider creating multiple smaller FDs for better flexibility.

The Deposit Insurance and Credit Guarantee Corporation (DICGC), an RBI subsidiary, insures up to ₹5 lakh per depositor per bank. This ₹5 lakh covers your total deposits (savings, FD, RD, current accounts) at the same bank under the same ownership. If you have ₹3 lakh in savings and ₹4 lakh in FDs at the same bank, your total exposure is ₹7 lakh but only ₹5 lakh is insured. To protect amounts above ₹5 lakh, spread deposits across multiple banks (not just multiple branches). All scheduled commercial banks, small finance banks, and most cooperative banks are DICGC members. Public sector bank failure is extremely rare historically, but private and cooperative bank failures do occur.

FD laddering means splitting your investment across FDs with staggered maturity dates instead of one single long-term FD. For example, instead of ₹12 lakh in one 3-year FD, create four FDs of ₹3 lakh each maturing in 1, 2, 3, and 4 years. Benefits: you get liquidity every year without premature withdrawal penalties; you reduce reinvestment risk by not locking all money at a single interest rate; longer tenures (which usually offer higher rates) are utilized for most of the corpus. When each FD matures, reinvest at the longest available tenure at the then-current rate. For risk-averse investors, disciplined laddering over 10 years often outperforms keeping money in a savings account and beats many debt mutual funds on post-tax basis for lower tax brackets.

The decision depends on two factors: your cash flow needs and the current interest rate environment. When rates are high (rising RBI cycle), prefer shorter tenures of 1 to 2 years so you can renew at even higher rates soon. When rates are falling or expected to fall, lock in longer tenures of 3 to 5 years to protect your current yield. For liquidity, ladder your FDs across multiple maturity dates instead of a single long-term FD - this gives you access to funds each year without premature withdrawal penalties. For goals within 3 years, match the FD tenure to the goal date. Tax-saver FDs have a mandatory 5-year lock-in and qualify for Section 80C deduction up to Rs. 1.5 lakh.