Simple vs compound interest FDs
Almost all bank fixed deposits in India use compound interest, not simple interest — the interest earned in one compounding period is added back to the principal, so the next period earns interest on a slightly larger base. This calculator models that standard compounding behavior at your chosen frequency.
Cumulative vs non-cumulative (payout) FDs
A cumulative FD reinvests all interest and pays out a single lump sum at maturity — this is what this calculator models. A non-cumulative (payout) FDinstead pays out interest periodically (monthly, quarterly, etc.) as income, without reinvesting it. The total interest earned over the tenure is similar either way (payout FDs earn slightly less overall since the interest isn't compounded), but which one suits you depends on whether you need regular income or a lump sum at the end.
TDS mechanics and Form 15G/15H
Once your total FD interest from a single bank crosses ₹40,000 in a financial year (₹50,000 for senior citizens), the bank deducts TDS automatically — 10% if your PAN is on record, or 20% if it isn't. If your total income is below the taxable threshold, you can submit Form 15G (if you're under 60) or Form 15H (if you're a senior citizen) to the bank to stop this deduction at source. This doesn't change whether the interest is taxable — it only stops the upfront deduction if you're not liable to pay tax anyway.
Premature withdrawal penalty
Breaking an FD before its tenure ends usually costs you a penalty — typically a 0.5%–1% reduction in the interest rate applied for the period you actually held the deposit. This penalty is entirely bank-specific, not a fixed government rate, so check your bank's terms before committing to a tenure.
FD vs RD vs SCSS
An FD suits a lump sum you can set aside all at once. If you'd rather save a fixed amount every month, see the RD calculator instead. If you're a senior citizen looking for a higher, government-backed rate with a fixed quarterly payout, compare against the SCSS calculator.