Fixed Deposits remain one of the most widely used savings instruments in India for their safety and predictable returns. When you place money in an FD, the bank pays you a fixed rate of interest for a fixed tenure, with the interest typically compounded quarterly by most banks — meaning your effective annual return is slightly higher than the quoted nominal rate.
This calculator computes your FD maturity value assuming quarterly compounding, which is the standard practice followed by most Indian banks. It's worth remembering that interest earned on FDs is fully taxable as "Income from Other Sources" at your applicable slab rate — FDs do not enjoy any special tax treatment on the interest earned (unlike, say, PPF).
Banks are also required to deduct TDS on FD interest if it exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), provided your PAN has been furnished — if PAN is not provided, TDS is deducted at a higher rate. This TDS is only an advance collection; your final tax liability on FD interest is determined by your total income and applicable slab when you file your return.
No, FD interest is fully taxable as "Income from Other Sources" at your applicable income tax slab rate — there is no exemption on the interest earned.
Banks deduct 10% TDS if your total FD interest from that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), provided PAN is furnished.
Yes — you can submit Form 15G (or Form 15H if you are a senior citizen) to the bank declaring that your total income is below the taxable threshold, to avoid TDS deduction.
Complex tax situation? Talk to a CA →