Fixed deposits or FDs are one of the most popular investment options in India because they offer safety and guaranteed returns. You deposit a lump sum amount with a bank for a fixed period (ranging from 7 days to 10 years), and the bank pays you interest at a fixed rate. Unlike equity investments where returns are uncertain, FD rates are guaranteed, making them attractive for conservative investors and senior citizens who need regular income.
For FY 2025-26, FD interest rates vary by bank, tenure, and deposit amount. Typically, rates range between 6-8% per annum for general public, with higher rates for senior citizens (usually 0.5% extra). Longer tenure FDs usually get better rates. However, interest earned on FD is fully taxable and gets added to your income, so you need to pay tax as per your tax slab. Banks also deduct 10% TDS if interest exceeds ₹40,000 in a year (₹50,000 for senior citizens).
Our FD calculator helps you calculate the maturity amount and interest you'll earn based on principal, interest rate, and tenure. If you have excess cash that you don't need for the near term, comparing FD returns with other options helps. Unlike PPF which gives tax-free returns but has lock-in, FDs are more flexible but interest is taxable. Unlike SIPs which have market risk, FDs have zero risk and guaranteed returns.
Many people use FDs for short-term goals, emergency fund, or to park money while deciding on other investments. The main drawback is post-tax returns are often lower than inflation, meaning your money's purchasing power decreases over time. That's why experts recommend mixing FDs with tax-free instruments like PPF and market-linked options like SIPs for long-term wealth creation. For retirement planning, consider NPS and retirement planning tools which offer better post-tax returns.
To compare FD rates across different banks and tenures, visit the RBI's website at RBI interest rate page which shows current market rates and helps you choose the best FD option for your needs.
Specify the amount you want to invest (minimum ₹1,000)
Enter the current FD interest rate (typically 6-8% p.a.)
Select the duration for your FD (7 days to 10 years)
Click calculate to see your potential returns and maturity value
Pro Tip
FD offers guaranteed returns with capital protection. Choose Tax Saver FD for 5-year lock-in and Section 80C benefits. Senior citizens get higher interest rates.
Fixed Deposit (FD) is a financial instrument provided by banks and NBFCs that offers guaranteed returns on your investment. It's one of the safest investment options with capital protection.
The minimum amount varies by bank, typically ranging from ₹1,000 to ₹10,000. Some banks offer FDs for as low as ₹100, while others may require higher minimum amounts.
Yes, you can withdraw your FD before maturity, but it may attract a penalty (usually 0.5-1% of the interest rate). Tax Saver FD has a 5-year lock-in period and cannot be withdrawn before maturity.
FD interest can be calculated using simple interest (for maturity payment) or compound interest (for regular payments). The frequency of interest payment affects the compounding and final maturity value.
Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus previously earned interest. Compound interest generally yields higher returns over time.
Yes, FD interest is taxable as per your income tax slab. Banks deduct TDS at 10% if interest exceeds ₹40,000 (₹50,000 for senior citizens). You can claim TDS credit while filing your income tax return.
The maximum tenure for regular FD is typically 10 years, while Tax Saver FD has a fixed 5-year tenure. Some banks may offer longer tenures up to 20 years for specific FD products.
Yes, you can take a loan against your FD, typically up to 90% of the FD value. The interest rate on such loans is usually 1-2% higher than the FD interest rate, making it a cost-effective borrowing option.
If you don't renew your FD after maturity, it will be converted to a savings account or current account and will earn interest at the prevailing savings account rate, which is much lower than FD rates.
Yes, FDs with banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakhs per depositor per bank. This includes both principal and interest amount.