FD Calculator — Post-Tax Returns, Bank Rate Comparison & Laddering
✓ Quarterly & monthly compounding, TDS-accurateUpdated 23 July 2026Bank rates verified for July 2026
Calculate the actual return on a Fixed Deposit — not just maturity value, but post-tax income by tax slab, real return after inflation, and how a senior citizen rate or a different compounding frequency changes the outcome. Plus a bank rate comparison, a ladder-strategy explainer, and the premature-withdrawal maths banks don't emphasise.
The rate on the FD receipt is not the return you actually get
Walk into a bank, ask about a Fixed Deposit, and the number they lead with is the headline interest rate. "7.25% for three years, sir." That number is not a lie. It is also not what ends up in your pocket. Between the headline rate and the money you eventually get, there are four things happening that most FD calculators do not show.
1. Tax. FD interest is added to your annual income and taxed at your marginal slab rate. In the 30% bracket, a 7.25% FD becomes 5.075% post-tax. In the 20% bracket, 5.80%. Only if your total income is below the taxable threshold — or if you are a senior citizen with income under ₹3 lakh — does the full 7.25% actually reach you. This is not a rounding issue; over five years, it is the difference between doubling your money and standing still.
2. Inflation. Post-tax 5.075% against India's typical 5-6% inflation is a real return of roughly zero. In some years — 2022 and 2023 both had inflation above 6% — FDs delivered negative real returns for taxable investors. The number that matters is not what your FD paid, but what it paid after tax and after inflation. That is the true purchasing-power outcome.
3. Compounding frequency. The formula every online FD calculator uses assumes some compounding assumption. Indian banks compound quarterly by default; some small finance banks compound monthly, giving a marginally higher effective yield at the same headline rate. On a 5-year FD, monthly compounding beats quarterly by roughly 5-8 basis points on effective yield. Small on paper, worth checking on your FD advice slip.
4. Premature withdrawal. If life happens and you break the FD early, the bank pays you interest at the rate applicable for the shorter tenure — not the rate you originally locked in — and deducts a 0.5-1% penalty. A 5-year FD at 7.5% broken at year 2 might effectively earn 5.75-6% for those two years, not 7.5%. Banks disclose this in the terms but rarely explain it upfront.
What this page does differently: the calculator below has four modes — Cumulative, Monthly Payout, Post-Tax by Slab, and Ladder Strategy — plus a senior citizen toggle and a live real-return calculation that subtracts inflation. Under it: current bank rate comparison, three worked examples with different life scenarios, and honest discussion of when FDs beat mutual funds and when they lose. Read them before locking money for 5 years.
Depositor
Compounding
₹5,00,000
7.25%
3 yrs
Non-cumulative FD paying interest monthly. Uses same principal, rate and tenure as Cumulative mode above.
5.5%
Instead of putting the entire principal in one FD, split it into 5 equal FDs of tenures 1, 2, 3, 4 and 5 years — a classic ladder. Uses the current principal from Cumulative mode.
Maturity amount
₹6,20,274
Principal
₹5,00,000
Interest earned
₹1,20,274
Effective yield (p.a.)
7.45%
Applied rate
7.25%
Principal 80.6%Interest 19.4%
A = 5,00,000 × (1 + 0.0725/4)^12 = ₹6,20,274
Post-tax reality — what you actually keep
Slab
30%
Tax on interest
₹36,082
Post-tax interest
₹84,192
Post-tax yield
5.20%
Real return (after 5.5% inflation)−0.30% p.a.
Current FD rates — July 2026
Interest rates below are for regular (non-senior) customers on cumulative FDs. Senior citizens typically get 50 basis points more. Small Finance Banks offer the highest rates but check DICGC exposure limits (₹5 lakh per bank).
Bank
1 yr
3 yr
5 yr
Senior +
SBIPSU
6.80%
6.75%
6.50%
+0.50%
HDFC Bank
6.90%
7.00%
7.00%
+0.50%
ICICI Bank
6.85%
7.00%
7.00%
+0.50%
Axis Bank
6.90%
7.10%
7.00%
+0.50%
Kotak Mahindra
6.85%
6.90%
6.20%
+0.50%
PNBPSU
6.85%
7.00%
6.50%
+0.50%
Bank of BarodaPSU
7.15%
7.15%
6.80%
+0.50%
AU Small Finance BankSFB
7.75%
8.00%
7.75%
+0.50%
Suryoday SFBSFB
8.20%
8.60%
8.25%
+0.50%
Utkarsh SFBSFB
8.00%
8.50%
7.75%
+0.50%
Verify before opening: rates change with RBI policy actions and bank-specific promotions. These were verified against bank websites on 23 July 2026. Also — for Small Finance Banks, DICGC insurance covers only ₹5 lakh per depositor per bank. If you plan to park more, spread across multiple SFBs, or restrict the top-rate portion to ₹5 lakh per bank.
Three worked examples — the FD maths in context
Example 1 · Standard FD in the 30% tax bracket
Principal : ₹5,00,000
Rate : 7.25% p.a. (quarterly compounding)
Tenure : 3 years
Depositor : Regular (below 60)
Maturity Formula: A = P × (1 + r/n)^(n×t)
= 5,00,000 × (1 + 0.0725/4)^12
= 5,00,000 × (1.018125)^12
= 5,00,000 × 1.24055
≈ ₹6,20,274
Pre-tax interest = ₹1,20,274
30% slab tax = ₹1,20,274 × 0.30 = ₹36,082
POST-TAX interest = ₹84,192
Post-tax annual yield ≈ 5.20%
Against 5.5% inflation, real return = −0.29% per year.
Meaning: your ₹5 lakh has actually lost purchasing power over
3 years, even though the FD "grew" by ₹1.2 lakh nominally.
Same FD in 20% slab → post-tax yield 5.96% → real return 0.46%
Same FD in exemption bracket → full 7.45% effective yield
Example 2 · Senior citizen with monthly payout FD
Principal : ₹10,00,000
Rate : 7.75% p.a. (regular 7.25% + 0.50% senior bonus)
Tenure : 5 years
Depositor : Senior citizen (65 years old)
Mode : Monthly payout (non-cumulative)
Monthly interest = 10,00,000 × 0.0775 / 12
= ₹6,458 per month
Annual interest income = ₹77,500
5-year total interest = ₹3,87,500
Principal returned at maturity = ₹10,00,000
Tax situation:
- 80TTB deduction for seniors: up to ₹50,000 exempt
- Taxable annual interest: ₹27,500
- If total income (pension + FD) puts him in 5% slab
→ tax on interest ≈ ₹1,375 per year
- Net monthly income (after tax): ₹6,344
Cash-flow tool, not a growth tool. Senior chooses monthly payout
because monthly income matters more than compounding.
Example 3 · Cumulative vs Ladder — same money, different structure
Total available: ₹5,00,000
Time horizon: 5 years
OPTION A — ONE BIG FD:
₹5,00,000 in one 5-year FD at 7.00%, quarterly compounding
Maturity value: ₹7,07,389
Total interest: ₹2,07,389
Weakness: no liquidity for 5 years; one rate locked
OPTION B — LADDER (5 FDs of ₹1L each):
1-yr FD @ 6.90% → ₹1,07,081 at year 1 → roll into new 5-yr @ prevailing rate
2-yr FD @ 7.00% → ₹1,14,888 at year 2 → roll into new 5-yr
3-yr FD @ 7.25% → ₹1,24,055 at year 3 → roll into new 5-yr
4-yr FD @ 7.25% → ₹1,33,296 at year 4 → roll into new 5-yr
5-yr FD @ 7.00% → ₹1,41,478 at year 5 → roll into new 5-yr
By year 5, principal roughly rolled into 5-yr FDs at then-current rates.
Each year one FD matures → guaranteed liquidity every 12 months.
The ladder gives up ~₹5,000-10,000 in year-1 interest for a permanent
rolling structure with annual maturity events. For anyone who might
need funds mid-cycle, the tradeoff is usually worth it.
Cumulative vs monthly payout — which to pick
At the same headline rate, cumulative always yields more because compounding works. But cumulative gives no cash flow until maturity. The choice depends on why you are opening the FD.
Aspect
Cumulative
Monthly payout
Cash flow
Nothing until maturity
Interest credited monthly
₹5L / 3yr / 7% yield
₹6,15,720 at maturity
₹2,917/month + ₹5L back
Total interest earned
₹1,15,720 (compounded)
₹1,05,000 (simple)
Best for
Growth, long horizon
Regular income needs
Typical user
Working professional saving for goal
Retiree, pensioner without regular income
Practical guidance: if you do not need the monthly interest immediately, cumulative wins — the compounded return is meaningfully higher over any tenure beyond 1 year. Choose monthly payout only when the monthly cash flow itself is the reason for the FD (retirement income, supplementing pension). Some banks offer quarterly and annual payout options too, which sit between the two on effective yield.
FD vs alternatives — where FDs actually win
FDs are not a bad choice, but they are not automatically the right one either. Here's an honest comparison against the alternatives, on the terms that actually matter.
Option
Typical pre-tax return
Taxation
Safety
Liquidity
Savings account
2.5 – 4.0%
Slab
DICGC ₹5L
Instant
Bank FD (large PSU/private)
6.5 – 7.2%
Slab
DICGC ₹5L
3-5 days (with penalty)
Small Finance Bank FD
7.75 – 8.6%
Slab
DICGC ₹5L
Same as bank FD
Corporate FD (AAA)
7.5 – 8.5%
Slab
No DICGC
Limited
PPF
7.1%
Fully exempt (EEE)
Sovereign
15-yr lock
Sr. Citizen Savings Scheme
8.2%
Slab (₹50k 80TTB)
Sovereign
5-yr lock
Debt mutual fund
7.0 – 8.5%
Slab (post 2023)
Market risk
1-3 days
Government bonds (7.75%)
7.75%
Slab
Sovereign
7-yr lock
Practical takeaways: for horizons under 2 years, bank FDs are hard to beat on safety-and-simplicity. For 3+ year horizons, PPF (if you have not hit the ₹1.5L annual cap) is tax-advantaged and safe. Senior Citizen Savings Scheme should be maxed by any eligible senior before considering FDs. Debt mutual funds have lost their tax edge post-2023 but still offer better liquidity than FDs. Small Finance Bank FDs are the "highest FD rate" trick — legitimate for up to ₹5 lakh per bank due to DICGC.
FD laddering — a strategy worth using
The biggest complaint about FDs is the tradeoff between yield and liquidity. Long FDs give better rates but lock your money; short FDs give worse rates but keep it accessible. Laddering is the standard workaround, and it works.
How it works
Instead of one ₹5 lakh 5-year FD, take five ₹1 lakh FDs of 1, 2, 3, 4 and 5 years. As each one matures — one per year — roll it into a new 5-year FD. After the first cycle (5 years), you have a permanent structure where an FD matures every 12 months. If rates rise, your ladder captures them; if rates fall, you already locked most of your money at higher rates.
What it costs
Compared to a single 5-year FD at the best long-tenure rate, the ladder starts out roughly 15-25 basis points lower on weighted average yield — because the 1-year and 2-year FDs pay less than the 5-year rate. This yield gap narrows as the ladder rolls into all 5-year FDs.
When it's worth it
You have ₹3 lakh+ to park and might need part of it in the next 5 years
You expect interest rates to change materially during the horizon
You want an emergency reserve that earns FD-level returns (via the near-term rung of the ladder)
Watch out for: banks often auto-renew maturing FDs at the prevailing rate. If you have a ladder, either set calendar reminders around each maturity date or explicitly request non-renewal so the maturity proceeds land in your savings account and you can choose the new tenure. Auto-renewal at a bad rate is a common source of ladder decay.
Premature withdrawal — the maths banks don't explain upfront
You take a 5-year FD at 7.5% and, two years in, you need the money for a medical emergency, a house down payment, or any other reason. Here's what actually happens.
Interest is recalculated at the shorter-tenure rate. The 5-year rate of 7.5% is void. The bank pays you whatever the 2-year FD rate was at the time you opened the FD — say 6.75%.
A penalty is applied on top. Typically 0.5% to 1%, deducted from the recalculated rate. So the effective rate for those 2 years is 6.25-5.75%, not 7.5%.
TDS and tax still apply on the reduced interest.
On a ₹5 lakh 5-year FD at 7.5% quarterly compounded, if you break at year 2:
Full 5-year maturity value : ₹7,24,974 (never realised)
Interest for 2 yrs @ 7.5% cumul : ₹80,111 (expected but not paid)
INSTEAD, bank pays:
Rate applied for the 2 years : 6.75% (2-yr FD rate at open time)
Penalty : −0.50%
Effective rate : 6.25%
Interest actually credited : ₹66,027 (approx.)
Interest lost due to breakage : ₹14,084
Effective annual yield on
the 2 years you actually stayed : ~6.25% not 7.5%
Ways to soften this: some banks waive the penalty for senior citizens, or for withdrawals due to documented medical emergencies. Sweep-in FDs (linked to your savings account) allow partial premature withdrawal without breaking the entire FD. And a laddered FD structure means you almost never need to break a specific FD — the next maturity is usually within 12 months.
FD formulas — the maths in every mode
CUMULATIVE FD (compound interest):
A = P × (1 + r/n)^(n × t)
Where:
A = Maturity amount
P = Principal
r = Annual interest rate (as decimal, e.g. 0.0725)
n = Compounding periods per year (4 for quarterly, 12 monthly)
t = Tenure in years
Interest earned = A − P
MONTHLY PAYOUT FD (simple interest paid monthly):
Monthly interest = P × r / 12
Total interest = P × r × t
Principal returned at maturity
EFFECTIVE ANNUAL YIELD:
yield = ((A / P)^(1 / t) − 1) × 100
POST-TAX RETURN:
Post-tax yield = pre-tax yield × (1 − slab rate)
Real return = Post-tax yield − Inflation rate
Why quarterly compounding beats simple interest
On a ₹1 lakh 3-year FD at 7%, simple interest pays ₹21,000 (₹7,000 per year × 3 years). Quarterly compounding pays ₹23,144 — a difference of ₹2,144, or 10% more. The reason: after the first quarter's interest is credited, next quarter's interest is calculated on the slightly larger balance, and so on for 12 quarters. This is why cumulative FDs outperform monthly-payout FDs at the same headline rate.
Yes, entirely, at your income tax slab rate. FD interest is added to your annual income and taxed at whatever marginal rate applies — 5%, 10%, 15%, 20%, 25% or 30% depending on your total taxable income. There is no separate concessional rate for FD interest. This is why an 8% FD in the 30% bracket delivers only 5.6% post-tax return, and often ends up below the inflation rate.
What is TDS on FD interest? ▼
Banks deduct 10% TDS if your PAN is on record and interest crosses ₹40,000 per year (₹50,000 for senior citizens) — thresholds set by Section 194A. Without PAN, TDS is 20%. Note two important things: TDS is not your final tax — it is an advance payment against your total tax liability, and if your slab is higher, you owe the difference at ITR time. Also, the ₹40,000 threshold is per bank branch not per FD, so splitting an FD across branches of the same bank does not help.
What is the difference between cumulative and non-cumulative FD? ▼
Cumulative FDs reinvest interest each quarter and pay everything at maturity — the interest compounds, and the maturity amount is higher. Non-cumulative FDs pay interest monthly, quarterly or annually as regular income. At the same headline rate, cumulative always yields more, because compounding works. Non-cumulative is chosen for regular income needs (senior citizens without pension, for example) — you trade a slightly lower effective yield for cash flow certainty.
Can I withdraw an FD before maturity? ▼
Yes, but with two costs. First, the bank charges a premature withdrawal penalty of 0.5% to 1% of the deposit amount. Second, and more importantly, the interest rate is recalculated at the rate applicable for the tenure you actually stayed — not the rate you originally locked in. If you took a 5-year FD at 7.5% but break it at 2 years, the bank pays you the 2-year FD rate (say 6.75%) minus the penalty. Some banks waive the penalty for senior citizens and for withdrawals due to medical emergencies.
Which bank has the highest FD rate right now? ▼
As of July 2026, Small Finance Banks (like Suryoday, Utkarsh, ESAF, AU) typically offer 100-150 basis points more than large private and public sector banks. On a 3-year FD: PSU banks 6.75-7.15%, large private banks 7.00-7.15%, small finance banks 8.00-8.50%. Senior citizens get 50 basis points more everywhere. But note — small finance banks are still covered under DICGC insurance up to ₹5 lakh per bank, so parking more than ₹5 lakh in any single small bank carries residual risk. Verify current rates directly from the bank's website.
Is FD safer than a mutual fund? ▼
Different kinds of safety. FDs give guaranteed nominal returns with no market risk — you know exactly what you will get. But they carry inflation risk (post-tax return often below inflation), reinvestment risk (renewal at unknown future rate), and credit risk (DICGC covers only ₹5 lakh per bank). Debt mutual funds have market-value fluctuation but often deliver 100-150 bps more than equivalent FDs, and are more tax-efficient under LTCG rules for holdings above 3 years. For horizons under 2 years FDs typically win; over 3 years, debt funds usually do.
How much interest will I get on a ₹1 lakh FD? ▼
At 7% for 1 year with quarterly compounding, ₹1 lakh grows to ₹1,07,186 — an interest of ₹7,186. Post-tax in the 30% bracket, that is ₹5,030. At 7.25% for 3 years, ₹1 lakh grows to ₹1,24,055 — an interest of ₹24,058 total (about ₹8,000 per year). The compounding frequency matters — annual compounding on the same ₹1 lakh at 7% for 1 year gives ₹1,07,000, while quarterly compounding gives ₹1,07,186. Banks usually compound quarterly, some do monthly.
What is the FD interest rate for senior citizens? ▼
Senior citizens (60+) get 50 basis points more than regular customers across all major Indian banks. Super senior citizens (80+) get an additional 25 bps at some banks. So if the regular 1-year FD rate is 7%, a senior gets 7.50%. On top of that, TDS threshold for seniors is ₹50,000 per year instead of ₹40,000, and the Section 80TTB deduction lets seniors claim up to ₹50,000 of interest income as tax-deductible. Combined effect: a senior in the 20% bracket effectively enjoys FDs like a non-senior in the 15% bracket.
Are corporate FDs safer than bank FDs? ▼
No — usually less safe. Corporate FDs (offered by NBFCs and manufacturers like Bajaj Finance, HDFC Ltd, Shriram Finance) typically offer 100-200 basis points more than bank FDs. They are not covered by DICGC insurance. Credit ratings from CRISIL or ICRA help: AAA-rated corporate FDs have negligible default risk historically, but that history is not a guarantee. If yield is your priority and you accept credit risk, restrict to AAA-rated corporate FDs from listed entities, spread across issuers, and keep exposure below 10% of your fixed-income allocation.
What is FD laddering and does it work? ▼
Split one large FD into several of different maturities. Instead of ₹5 lakh in one 5-year FD, take five ₹1 lakh FDs of tenures 1, 2, 3, 4 and 5 years. As each one matures, roll it into a new 5-year FD. After the first cycle, you have a permanent structure where a portion matures every year. Two advantages — first, better liquidity (annual access to some principal without penalty); second, exposure to rate changes over time rather than locking everything at one rate. Downside: slightly lower average yield initially, since shorter tenures usually pay less.
Do I need to file ITR just for FD interest? ▼
You need to file ITR if your total income (salary + FD interest + other) exceeds the basic exemption limit — ₹3 lakh under the new tax regime, ₹2.5 lakh under the old. Even if your income is below the limit, filing ITR is useful when the bank has deducted TDS but your total income is not taxable — you get the TDS refunded. Interest is reported under "Income from Other Sources" in the ITR, and the Form 26AS shows all TDS deducted by all banks against your PAN, which auto-populates in the ITR.
How is FD interest actually calculated — quarterly or monthly compounding? ▼
Indian banks compound quarterly by default — the interest is credited every quarter and added to the principal for the next quarter. Some smaller banks and NBFCs offer monthly compounding, which produces a slightly higher effective yield at the same headline rate. On a ₹1 lakh 3-year FD at 7%, quarterly compounding gives ₹1,23,144 (7.19% effective) while monthly compounding gives ₹1,23,293 (7.23% effective). Small difference on 3 years, larger on 5 years. Ask your bank which frequency they use — it should be on the FD advice slip.
What is Form 15G / 15H for FDs? ▼
A self-declaration to the bank that your total taxable income is below the exemption limit, so no TDS should be deducted on your FD interest. Form 15G is for regular customers under 60. Form 15H is for senior citizens. You submit it at the beginning of each financial year, ideally in April, for every bank where you have deposits. If you submit late and TDS is already deducted, you can claim it back only through ITR filing. False declarations attract penalty under Section 277 — file only if you genuinely have no tax liability.
Can I claim FD investment as a tax deduction? ▼
Only tax-saver FDs — specific 5-year FDs marked as eligible under Section 80C — allow deduction of up to ₹1.5 lakh per year from taxable income. Regular FDs do not qualify. Tax-saver FDs have a 5-year lock-in (no premature withdrawal at all) and usually pay 25-50 bps less than a regular 5-year FD. This deduction is only available under the old tax regime; the new regime does not allow 80C deductions.
What happens to my FD if the bank fails? ▼
Deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI. Cover is ₹5 lakh per depositor per bank — including both principal and interest, across all your accounts and FDs with that one bank combined. If your FDs across one bank exceed ₹5 lakh, the excess is not automatically insured. To fully insure ₹15 lakh, split across three different banks. The ₹5 lakh cover was raised from ₹1 lakh in 2020; there is periodic discussion of raising it further.
Important: All calculations use the standard compound and simple interest formulas prescribed for Indian FDs. Bank rates shown were verified against the respective bank websites on 23 July 2026 and change frequently based on RBI policy actions and bank-specific promotions. TDS thresholds and tax slab rates cited are as of Finance Act 2025 for AY 2026-27; consult the current tax slab notification and a CA before any investment or tax filing decision. Small Finance Bank and Corporate FD investments carry additional credit and liquidity risk not present in scheduled commercial bank FDs — DICGC insurance is limited to ₹5 lakh per bank per depositor. This page is educational and does not constitute financial or tax advice.