Fixed Deposit (FD) & RD Calculator
Calculate maturity value and interest earnings on bank fixed and recurring deposits. Includes quarterly compounding, senior citizen bonus rates, and tax deduction thresholds.
Current Top Bank FD Rates (2026)
Indicative 1 to 5-year fixed deposit interest rates
| Bank / Institution | Regular Rate | Senior Citizen Rate | Special High-Yield Tenures |
|---|---|---|---|
| State Bank of India (SBI) | 6.80% - 7.10% | 7.30% - 7.60% | 400 Days (Amrit Kalash 7.10%) |
| HDFC Bank | 7.00% - 7.25% | 7.50% - 7.75% | 35 Months & 55 Months Special |
| ICICI Bank | 7.00% - 7.20% | 7.50% - 7.75% | 15 Months to 2 Years |
| Post Office Time Deposit (TD) | 6.90% - 7.50% | Same (No senior extra) | 5-Year TD (7.50% + Sec 80C) |
| Small Finance Banks (SFBs) | 8.25% - 8.75% | 8.75% - 9.25% | Unity, Suryoday, Equitas SFB |
Understanding Bank Fixed Deposits & Recurring Deposits in India
Quarterly compounding mechanics, Section 194A TDS rules, and DICGC insurance
Fixed Deposits (FDs) and Recurring Deposits (RDs) remain the foundational pillar of conservative Indian household savings. Offering guaranteed capital protection, predictable returns, and unmatched liquidity through premature withdrawal and overdraft loan facilities, bank deposits form the bedrock of financial planning.
How Quarterly Compounding Works in Indian Banks
Many depositors mistakenly assume their FD interest is compounded annually. In India, scheduled commercial banks adhere strictly to the quarterly compounding convention recommended by the Indian Banks’ Association (IBA):
Indian Bank FD Compounding Formula:
A = P × [1 + (r / 400)]^(4 × t)
Where P is principal deposit, r is the annual nominal interest rate, and t is the tenure in years. Because interest earned in the first quarter is added to the principal for the second quarter, your effective yield is always noticeably higher than the nominal rate!
Section 194A TDS Rules & Form 15G / 15H
Under Section 194A of the Income Tax Act, 1961, banks are legally mandated to deduct Tax Deducted at Source (TDS) at 10% if total interest credited across all branches in a financial year crosses the statutory threshold:
- Regular Citizens (< 60 Years): TDS threshold is ₹40,000 per year.
- Senior Citizens (60+ Years): Enhanced threshold of ₹50,000 per year under Section 80TTB.
- PAN Not Provided: If you fail to submit your Permanent Account Number (PAN), TDS is deducted at the punitive rate of 20%!
- How to Avoid TDS (Form 15G / 15H): If your total estimated taxable income for the financial year is below the basic exemption limit (₹2.5 Lakh / ₹3 Lakh under old regime or ₹3 Lakh under new regime), you can submit Form 15G (regular citizens) or Form 15H (senior citizens) to your bank at the start of the financial year to request zero TDS deduction.
Deposit Insurance: How DICGC Protects Your Money
Under the Deposit Insurance and Credit Guarantee Corporation Act, all commercial banks, small finance banks, and cooperative banks in India are insured by the DICGC (a subsidiary of the Reserve Bank of India).
In the rare event of a bank liquidation or license cancellation, each depositor is legally insured up to ₹5,00,000 (Rupees Five Lakhs) for both principal and accrued interest across all accounts held in that specific bank. To maximize safety, smart depositors distribute large corpuses across multiple scheduled banks.
Tax-Saver 5-Year Fixed Deposits (Section 80C)
If you seek tax deduction under Section 80C, banks offer specialized Tax-Saver FDs with a mandatory 5-year lock-in period. Contributions up to ₹1,50,000 per year qualify for 80C tax deduction. However, note that premature withdrawal and loans against tax-saver FDs are strictly prohibited by law.
Frequently Asked Questions (FAQs)
What is the penalty for premature FD withdrawal? ▾
Most Indian commercial banks charge a penalty of 0.50% to 1.00% on the effective interest rate applicable for the period the deposit actually remained with the bank. Some banks offer special "No-Penalty" FDs with slightly lower starting rates.
Can I take a loan against my Fixed Deposit? ▾
Yes. Banks offer overdraft or loan facilities against your regular FD up to 90% to 95% of the deposit value. The interest charged is typically 1% to 2% above the FD interest rate, allowing you to meet temporary emergency cash needs without breaking your FD.
What is the difference between Cumulative and Non-Cumulative FDs? ▾
In a Cumulative FD, interest is reinvested quarterly and paid out together with the principal at maturity (ideal for wealth creation). In a Non-Cumulative FD, interest is credited directly to your savings account monthly, quarterly, or annually (ideal for retirees needing regular cash flow).
How does a Recurring Deposit (RD) differ from a SIP? ▾
A Recurring Deposit offers a guaranteed, fixed interest rate with zero capital risk backed by bank guarantees. A Systematic Investment Plan (SIP) invests in market-linked mutual funds with variable returns (often 12-14% over long horizons) but subject to stock market volatility.
No TDS will be deducted by your bank as interest is within the statutory limit.