What is the difference between nominal rate and effective annual yield?

The nominal rate is the stated annual interest rate (e.g. 7.5%). The effective annual yield reflects the extra return generated by compounding interest during the year (e.g. 7.71% for quarterly compounding).

Is TDS deducted on fixed deposit interest?

Yes. In India, banks deduct Tax Deducted at Source (TDS) if total annual FD interest income exceeds the statutory threshold (₹40,000 for general citizens, ₹50,000 for senior citizens). Form 15G/15H can be submitted if your total income is below the taxable limit.

Can senior citizens get higher interest rates on FDs?

Yes, most banks offer an additional 0.50% to 0.75% interest per annum on fixed deposits for senior citizens aged 60 and above.

FD Calculator — Free Online Calculator

About the FD Calculator

The CalcNest Fixed Deposit (FD) Calculator computes your guaranteed maturity returns and accumulated interest across monthly, quarterly, semi-annual, and annual compounding schedules. Fixed deposits provide risk-free capital preservation and predictable cash flows.

Mathematical Formula

A = P × (1 + r/n)^(n × t)

Where P is the initial deposit, r is the annual nominal interest rate (in decimals), n is the compounding frequency per year, and t is the tenure in years.

Variables & Components

P Principal Deposit: The lump-sum amount placed in the fixed deposit account.

r Annual Rate of Interest: Nominal interest rate per annum offered by the bank.

n Compounding Frequency: Number of times interest is compounded per year (Quarterly = 4, Monthly = 12).

t Deposit Tenure (Years): Total term duration for which the fixed deposit is locked in.

A Maturity Amount: Total lump-sum receivable upon completion of tenure.

Worked Example: ₹1,00,000 Fixed Deposit at 7.5% for 5 Years (Quarterly Compounding)

Depositing a lump sum of ₹1,00,000 in a bank fixed deposit earning 7.5% per annum with quarterly interest compounding.

Step-by-Step Calculation

Interest rate in decimals: r = 7.5 / 100 = 0.075
Compounding frequency (Quarterly): n = 4
Total compounding periods: n × t = 4 × 5 = 20 quarters
Periodic growth factor: (1 + 0.075 / 4)^20 = (1.01875)^20 = 1.44995
Calculate Maturity Amount: A = 1,00,000 × 1.44995 = ₹1,44,995
Total Interest Earned: ₹1,44,995 - ₹1,00,000 = ₹44,995 (Effective Annual Yield = 7.71%)

Final Result: Principal: ₹1,00,000 | Interest Earned: ₹44,995 | Maturity Amount: ₹1,44,995

How to Use This Calculator

Enter your initial Fixed Deposit principal investment.

Enter the annual interest rate offered by your bank or NBFC.

Choose the deposit tenure in years.

Select the compounding interval (Quarterly is standard across most commercial banks in India).

Frequently Asked Questions

Most Indian commercial banks calculate and compound interest on fixed deposits on a quarterly basis. For tenures less than 6 months, simple interest is generally applied.

FD Calculator

About the FD Calculator

Mathematical Formula

Variables & Components

Worked Example: ₹1,00,000 Fixed Deposit at 7.5% for 5 Years (Quarterly Compounding)

Step-by-Step Calculation

How to Use This Calculator

Frequently Asked Questions

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