Fixed Deposit (FD) & Term Deposit Calculator

Last verified: 2026-07-15

Calculate exact Indian Fixed Deposit maturity amounts, quarterly compound interest yield, senior citizen rates (+0.50%), and statutory Section 194A TDS withholding across cumulative and non-cumulative schemes.

Quick Banking Scenarios & Benchmarks
Applies +0.50% interest rate premium & Rs 50,000 TDS exemption threshold
Total Maturity Payout
₹107291.28
Total Interest: ₹7291.28Effective Nominal Rate: 7.10%
Deposit Growth & Tax BreakdownProportional Shares
Initial Principal:
₹100000.00
Gross Interest Earned:
₹7291.28
Section 194A TDS (10%):
₹0.00
Effective Annual Yield (APY):
7.29%
⚡ Senior Citizen vs. TDS Exemption Challenge

If a regular citizen deposits Rs 6 Lakhs at 7.00% p.a., the bank deducts 10% TDS because annual interest (Rs 43,115) exceeds Rs 40,000. What happens if a Senior Citizen (60+ years) makes the exact same deposit at 7.50%?

Mathematical Formulas & Compound Interest Derivation Notes

Under Indian banking regulations governed by the Reserve Bank of India (RBI) and Indian Banks' Association (IBA) schedules, commercial banks compound interest on term deposits of over 180 days on a quarterly basis (`n = 4`). The maturity formula is derived from standard compound interest equations:

A = P × ( 1 + r / n )^( n × t )

Where:
• P = Principal Deposit Amount (initial investment)
• r = Nominal Annual Interest Rate (expressed as decimal, e.g., 0.071 for 7.10%)
• n = Compounding Frequency per Year (`n = 4` for quarterly, `n = 12` for monthly)
• t = Deposit Tenure in Years

For short-term fixed deposits maturing in 180 days or fewer, simple daily interest is applied to avoid excessive compounding inflation:

A_simple = P + [ P × r × ( Days / 365 ) ]

Statutory Tax Deducted at Source (Section 194A):Whenever the gross credited annual interest exceeds Rs 40,000 across a bank's branches (Rs 50,000 for senior citizens aged 60+), the bank acts as a statutory withholding agent and deducts 10% tax (`TDS = I_gross × 0.10`) if PAN is provided, or 20% if PAN is not submitted.

Authoritative Sources & Regulatory References

  • Reserve Bank of India (RBI) — Master Direction on Interest Rate on Deposits, 2016 (rbi.org.in)
  • Income Tax Department, Government of India — Section 194A of Income Tax Act, 1961 (TDS on Interest) (incometaxindia.gov.in)
  • Indian Banks' Association (IBA) — Quarterly Compounding Schedules for Commercial Bank Term Deposits

About the Fixed Deposit (FD) Calculator

A Fixed Deposit (FD) — also known as a term deposit or time deposit — is one of the most trusted and widely utilized fixed-income investment instruments across Indian banking and global financial markets. By locking in a lump-sum principal amount for a predetermined tenure ranging from 7 days to 10 years, depositors earn a guaranteed, fixed rate of return that is immune to equity market volatility. Under Indian banking regulations governed by the Reserve Bank of India (RBI) and Indian Banks' Association (IBA) standards, commercial banks compound interest on long-term fixed deposits on a quarterly basis (`frequency = 4`), allowing interest earned in one quarter to generate compound returns in all subsequent quarters. Our doctoral-grade Fixed Deposit Calculator allows you to precisely model your investment maturity across both Cumulative (reinvestment) and Non-Cumulative (periodic income payout) schemes, automatically applying senior citizen rate enhancements (+0.50% p.a.) and statutory Tax Deducted at Source (TDS) withholding rules under Section 194A of the Income Tax Act.

Mathematical Formula & Logic

Cumulative Fixed Deposit (Quarterly Compounding Equation - IBA Standard): A = P × ( 1 + r / n )^( n × t ) Where P is Principal, r is Nominal Annual Rate (decimal), n is Compounding Frequency (4 for quarterly), t is Tenure in Years. Short-Tenure Simple Interest FD Equation (<= 180 Days): A = P + [ P × r × ( Days / 365 ) ] Non-Cumulative FD Periodic Payout Equation: I_periodic = P × ( r / k ) Where k = 4 for Quarterly Payout or k = 12 for Monthly Payout. Section 194A TDS Statutory Withholding: TDS = 10% of Gross Interest (if Gross Interest > Rs 40,000 for Regular Citizens or > Rs 50,000 for Senior Citizens aged 60+).

Step-by-Step Example

Let us calculate the maturity amount and tax withholding for a Rs 10,00,000 (10 Lakhs) Fixed Deposit under a Senior Citizen (+0.50% premium) plan at 6.50% base rate for 1 Year: 1. Determine Effective Rate & Compounding Frequency: Base Rate = 6.50%, Senior Citizen Premium = +0.50% -> Effective Nominal Rate r = 7.00% (0.07). Compounding Frequency n = 4 quarters/year (Indian commercial bank standard). Quarterly Rate = 0.07 / 4 = 0.0175. 2. Compute Gross Maturity Amount & Interest: A = Rs 10,00,000 × (1.0175)^4 = Rs 10,71,859.03. Gross Compound Interest = Rs 10,71,859.03 - Rs 10,00,000 = Rs 71,859.03. Effective Annual Yield (APY) = 7.19%. 3. Evaluate Section 194A Statutory TDS Deduction: Since the depositor is a Senior Citizen (aged 60+), the annual TDS exemption threshold is Rs 50,000. Because Rs 71,859.03 > Rs 50,000, statutory 10% TDS withholding applies to the entire gross interest: TDS Withheld (10%) = Rs 71,859.03 × 0.10 = Rs 7,185.90. 4. Net Cash Flow & Payout to Depositor: Net Interest after TDS = Rs 71,859.03 - Rs 7,185.90 = Rs 64,673.13. Total Net Maturity Amount deposited to bank account = Rs 10,64,673.13.

Reference Data & Values

scheme typecompounding frequencyinterest treatmenttds applicability
Cumulative FD (>180 Days)Quarterly (n = 4)Reinvested quarterly to earn compound interest10% deducted annually if interest > threshold
Short-Tenure FD (<=180 Days)Simple Daily InterestComputed on exact days (Days / 365)10% deducted annually if interest > threshold
Non-Cumulative Quarterly PayoutQuarterly Distribution (k = 4)Direct cash payout to bank account (P × r / 4)10% deducted across periodic credit installments
Senior Citizen FD Tier (60+ Years)Quarterly / Monthly PayoutStandard +0.50% rate premium added to base rateExemption limit raised from Rs 40,000 to Rs 50,000

Frequently Asked Questions

For term deposits with tenures exceeding 6 months, Indian commercial banks compound interest quarterly by default per Indian Banks' Association (IBA) guidelines. The formula used is A = P × (1 + r/4)^(4t), where P is principal, r is annual rate, and t is tenure in years. For short tenures up to 180 days, simple interest is applied (`A = P + P × r × days / 365`).
In a Cumulative FD, interest earned every quarter is reinvested and added to your principal balance to earn compound interest, giving you a lump-sum payout at maturity. In a Non-Cumulative FD, interest is not reinvested but paid out directly to your savings account at regular intervals (monthly, quarterly, or half-yearly), providing steady periodic cashflow without compounding growth.
Almost all public and private sector banks in India (such as SBI, HDFC Bank, and ICICI Bank) offer an additional interest rate premium of 0.50% (50 basis points) p.a. to senior citizens (individuals aged 60 years and above) across all term deposit tenures.
Under Section 194A of the Indian Income Tax Act, a bank must deduct Tax Deducted at Source (TDS) at 10% if your total interest income credited across all branches of that bank exceeds Rs 40,000 in a financial year (or Rs 50,000 for senior citizens). If you do not provide a valid PAN card, TDS is deducted at a higher rate of 20%.
Yes. If your total annual income is below the basic tax exemption limit (or you have zero tax liability), you can submit Form 15G (for individuals below 60 years) or Form 15H (for senior citizens aged 60+) to your bank at the start of each financial year. Upon verification, the bank will not deduct any TDS on your FD interest.
No. TDS is merely an advance tax mechanism collected by the bank on behalf of the government. Regardless of whether TDS is deducted or whether you submitted Form 15G/15H, all fixed deposit interest is fully taxable and must be declared under 'Income from Other Sources' in your annual Income Tax Return (ITR), taxed according to your personal income tax slab rate.
Because Indian banks compound interest quarterly, interest earned in the first quarter starts earning interest in the second, third, and fourth quarters. For example, an advertised nominal rate of 7.10% p.a. compounded quarterly produces an effective annualized yield (Annual Percentage Yield or APY) of 7.29%.
If you withdraw your FD before the agreed maturity date, banks typically levy a premature withdrawal penalty of 0.50% to 1.00%. The interest rate payable to you will be the rate applicable for the exact period the deposit remained with the bank minus the penalty (not the original contracted rate for the full tenure).