FD & RD Calculator — Fixed and Recurring Deposit Returns

How fixed deposit interest is calculated

Indian banks compound FD interest quarterly by default, using:

A = P × (1 + r/n)^(n×t)

where P is your deposit, r the annual rate as a decimal, n the number of compounding periods per year (4 for quarterly) and t the tenure in years. Higher compounding frequency gives a slightly higher maturity for the same headline rate — switch the frequency above to see the difference.

The tax problem nobody mentions

FD interest is fully taxable at your income slab rate. This is the single biggest reason FDs underperform. A 7% FD returns only:

• 7.00% if you pay no tax
• 6.65% in the 5% slab
• 5.60% in the 20% slab
• 4.90% in the 30% slab

With retail inflation around 5-6%, a 30%-bracket taxpayer earning 4.9% post-tax is effectively losing purchasing power. That is the case for keeping only your emergency fund and short-term needs in FDs.

TDS on FD interest

Banks deduct 10% TDS once your interest crosses ₹50,000 in a financial year (₹1 lakh for senior citizens). If your total income is below the taxable limit, submit Form 15G (or 15H if you are a senior citizen) to avoid the deduction. TDS is not the final tax — you still settle the balance at your slab rate when filing.

FD vs RD — which suits you?

• FD — one lump sum, the whole amount compounds from day one. Best when you already have the money.
• RD — a fixed sum every month. Best for building a habit out of monthly salary. Each instalment compounds only for its remaining months, so total interest is lower than an equivalent FD.