FD Interest Calculator: How Much Does ₹1 Lakh

You put ₹1 lakh in an FD at 7%. A year later, you expect ₹1,07,000. But with quarterly compounding, you get ₹1,07,186. And after TDS at 10%, you actually receive ₹1,06,467. The gap between "7% advertised" and "what hits your account" is the whole story.

The FD Interest Formula

Maturity Amount = Principal × (1 + rate/n)^(n×t)

Where n = compounding frequency (4 for quarterly, most Indian banks)

📊 ₹1,00,000 at 7% — Compounding Frequency Matters

| Compounding | 1 Year | 3 Years | 5 Years | 10 Years | |------------|--------|---------|---------|----------| | Simple interest | ₹1,07,000 | ₹1,21,000 | ₹1,35,000 | ₹1,70,000 | | Quarterly (standard) | ₹1,07,186 | ₹1,22,926 | ₹1,40,255 | ₹1,96,715 | | Monthly | ₹1,07,229 | ₹1,23,356 | ₹1,41,045 | ₹1,99,003 | | Daily | ₹1,07,250 | ₹1,23,570 | ₹1,41,434 | ₹2,00,136 |

The Trench Truth: Indian banks compound quarterly by default. The difference between quarterly and daily compounding on ₹1 lakh over 5 years is only ₹1,179 — less than ₹20/month. Don't chase compounding frequency; chase the highest interest rate. A 7.5% FD with quarterly compounding beats a 7% FD with daily compounding every time. The rate matters 20× more than the frequency.

📊 Bank-by-Bank FD Rates (2024-25)

| Bank | 1 Year | 3 Years | 5 Years | Senior Citizen (+0.5%) | |------|--------|---------|---------|----------------------| | SBI | 6.80% | 7.00% | 6.85% | 7.35% | | HDFC Bank | 7.15% | 7.25% | 7.25% | 7.75% | | ICICI Bank | 7.00% | 7.15% | 7.20% | 7.70% | | PNB | 7.00% | 7.00% | 6.80% | 7.30% | | Bank of Baroda | 6.85% | 7.05% | 6.85% | 7.35% | | Kotak Mahindra | 7.10% | 7.25% | 7.20% | 7.70% | | Small Finance Banks | 8-9% | 8-9% | 8-9% | 8.5-9.5% | | Utkarsh SFB | 8.50% | 8.50% | 8.50% | 9.00% | | Jana SFB | 8.50% | 8.50% | 8.50% | 9.00% |

Small finance banks offer 1.5-2% more than SBI — but are they safe? Yes, up to ₹5 lakh per depositor per bank under DICGC insurance.

Maturity Amounts by Principal

📊 ₹1,00,000 at 7% (Quarterly Compounding)

| Years | Maturity | Interest Earned | After 30% Tax | |-------|---------|----------------|---------------| | 1 | ₹1,07,186 | ₹7,186 | ₹5,030 | | 3 | ₹1,22,926 | ₹22,926 | ₹16,048 | | 5 | ₹1,40,255 | ₹40,255 | ₹28,179 | | 10 | ₹1,96,715 | ₹96,715 | ₹67,701 |

📊 ₹5,00,000 at 7% (Quarterly Compounding)

| Years | Maturity | Interest Earned | After 30% Tax | |-------|---------|----------------|---------------| | 1 | ₹5,35,931 | ₹35,931 | ₹5,35,931* | | 3 | ₹6,14,630 | ₹1,14,630 | ₹5,80,241 | | 5 | ₹7,01,276 | ₹2,01,276 | ₹6,40,893 | | 10 | ₹9,83,576 | ₹4,83,576 | ₹8,38,503 |

*TDS deducted at source; actual in-hand depends on your slab

TDS on FD Interest

📊 TDS Rules

| Condition | TDS Rate | Surcharge + Cess | |-----------|---------|-----------------| | Interest ≤ ₹40,000/year (₹50K for seniors) | No TDS | — | | Interest > ₹40K, PAN submitted | 10% | +4% cess = 10.4% effective | | Interest > ₹40K, PAN NOT submitted | 20% | +4% cess = 20.8% effective | | Interest > ₹5L/year | 10% + surcharge | Higher effective rate |

📊 How to Avoid TDS (Legally)

| Method | How | Works For | |--------|-----|----------| | Submit Form 15G/15H | Declare your total income is below taxable limit | People with income < ₹2.5L (₹3L seniors) | | Split across banks | Keep interest < ₹40K per bank per year | Large FD amounts | | Split across financial years | Time FD maturity across April-March | Timing strategy | | Joint FD | Split interest income between holders | Couples |

Key Takeaways

Quarterly compounding is standard in India — daily compounding adds only ₹1,179 on ₹1L over 5 years
Small finance banks offer 8-9% — 1.5-2% more than SBI, DICGC insured up to ₹5L
TDS = 10% on interest above ₹40K/year — submit 15G/15H if below taxable income
After 30% tax, a 7% FD gives only 4.9% — barely beats 6% inflation
Senior citizens get 0.5% extra — always use senior citizen FD rates if eligible
Calculate your FD returns: Compound Interest Calculator | Loan EMI Calculator | Percentage Calculator

Frequently Asked Questions

Are small finance bank FDs safe? Yes, up to ₹5 lakh per depositor per bank under DICGC insurance (backed by RBI). Above ₹5 lakh, you're exposed to bank failure risk. Spread large amounts across multiple banks.

How is FD interest taxed? FD interest is fully taxable as "Income from Other Sources." TDS of 10% is deducted if interest exceeds ₹40,000/year (₹50,000 for seniors). Your actual tax liability depends on your income slab.

Should I break my FD early if rates increase? Early withdrawal typically costs 0.5-1% penalty on the applicable rate. Calculate: new FD rate minus penalty minus reinvestment time. Usually not worth it unless the rate difference is 1%+ and you have years remaining.

What is the difference between cumulative and non-cumulative FD? Cumulative FD pays interest at maturity (compounding works fully). Non-cumulative FD pays interest monthly/quarterly (good for regular income but lower total returns). Choose cumulative for growth, non-cumulative for income.

Can I avoid TDS on FD interest? Submit Form 15G (under 60) or 15H (above 60) at the start of the financial year if your total income is below the taxable limit. This tells the bank not to deduct TDS. No form needed if interest is below ₹40K/year.

Sources: RBI Bank Rate Data, DICGC Deposit Insurance, Income Tax Act Section 194A, SBI/HDFC/ICICI FD Rate Cards (2024-25).

FD Interest Calculator: How Much Does ₹1 Lakh Grow in 5 Years?