Is FD safe? What is the DICGC insurance limit?

Bank FDs are insured by DICGC (RBI subsidiary) up to ₹5 lakh per depositor per bank, covering both principal and interest. For amounts above ₹5 lakh, consider spreading across multiple banks. Corporate FDs from NBFCs are not covered by DICGC.

FD Calculator India — Fixed Deposit Calculator 2026

Q: Is FD interest taxable in India?

Yes. FD interest is fully taxable at your income tax slab rate. Banks deduct TDS at 10% if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G/15H to avoid TDS if your total income is below the basic exemption limit.

Q: What is a tax-saving FD?

A tax-saving FD has a 5-year lock-in and qualifies for Section 80C deduction up to ₹1.5 lakh/year. However, the interest earned is still taxable. PPF may be a better option as it offers the same 80C benefit with completely tax-free interest.

Q: What is the penalty for premature FD withdrawal?

Most banks charge a penalty of 0.5% to 1% on the applicable rate for premature withdrawal. The bank applies the rate for the actual period held, minus the penalty. Tax-saving FDs (5-year lock-in) cannot be withdrawn prematurely.

Calculate your Fixed Deposit maturity amount, interest earned, and TDS for FY 2025-26. Compare FD returns with PPF, debt mutual funds, and equity. Senior citizen rates, Form 15G/15H eligibility, and post-tax analysis included.

Enter your FD deposit details to see maturity amount and interest earned

Deposit amount

₹

Your lumpsum FD deposit amount

Interest rate

SBI: 6.50-7.25%, HDFC: 7.00-7.50% (March 2026)

Tenure (years)

Most FDs: 7 days to 10 years

Compounding frequency

Most banks compound quarterly

Senior citizen (60+)

Senior citizens get +0.50% higher rate at most banks

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How to Use This Calculator

FD Returns tab

Enter your deposit amount, interest rate, tenure, and compounding frequency. The calculator shows your maturity amount, total interest earned, periodic breakdowns, and estimated TDS. Toggle the senior citizen option for the +0.50% rate bonus.

Tax on FD Interest tab

Enter your annual FD interest and total income to see your TDS deduction, actual tax liability at your marginal slab rate, and whether you are eligible for Form 15G/15H. Compare New Regime vs Old Regime, and see the Section 80TTB benefit for senior citizens.

FD vs Other Options tab

Compare the same amount in Fixed Deposit vs PPF vs Debt Mutual Fund vs Equity Mutual Fund. See post-tax returns for each option side by side. Useful for deciding where to park your money based on your risk appetite and time horizon.

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The Formula

Fixed Deposits use compound interest. Most banks compound quarterly. The formula is:

FD Maturity Amount:
A = P × (1 + r/n)^n×t

Where:
P = Principal (deposit amount)
r = Annual interest rate (as decimal)
n = Compounding frequency per year (4 for quarterly)
t = Tenure in years

Example:
P = ₹5,00,000, r = 7.10%, n = 4 (quarterly), t = 3 years
A = 5,00,000 × (1 + 0.071/4)^4×3
A = 5,00,000 × (1.01775)¹²
A = 5,00,000 × 1.2352 = ₹6,17,614
Interest earned = ₹1,17,614

TDS (Section 194A):
10% on interest above ₹40,000/year (₹50,000 for senior citizens)
20% if PAN not submitted

Senior Citizen Bonus:
+0.50% p.a. above general citizen rate at most banks

The key insight: quarterly compounding gives slightly higher returns than annual compounding. On a ₹5 lakh FD at 7.1% for 3 years, the compounding benefit is approximately ₹1,500–2,000 compared to simple interest.

Example

Priya — IT professional depositing ₹5 lakh FD at SBI

Priya is 32, earns ₹12 lakh/year, and wants to park ₹5 lakh in a 3-year FD at SBI at 7.10% quarterly compounding.

Step 1: Calculate maturity

Deposit₹5,00,000

Rate7.10% p.a.

Tenure3 years

CompoundingQuarterly

Maturity amount₹6,17,614

Interest earned₹1,17,614

Step 2: Tax impact

Annual interest (approx.)₹39,205

TDSNil (below ₹40,000 threshold)

Marginal slab (₹12L income, new regime)15%

Actual tax on interest₹5,881/year

Step 3: Post-tax return

3-year interest (pre-tax)₹1,17,614

Approx. tax (3 years)₹17,642

Post-tax interest₹99,972

Effective post-tax rate~6.03% p.a.

Priya earns ₹1,17,614 interest over 3 years, but after 15% tax, her effective return is about 6.03%. If she had put the same ₹5 lakh in PPF at 7.1%, the entire interest would be tax-free.

FAQ

What is the current FD interest rate in India? ▼

As of March 2026, major bank FD rates for general citizens (1-3 year tenure) are: SBI: 6.50-7.25%, HDFC Bank: 7.00-7.50%, ICICI Bank: 6.90-7.25%. Small finance banks and NBFCs offer higher rates (8-9%) but carry slightly higher risk. Senior citizens get an additional 0.50% at most banks. Rates vary by tenure and deposit amount.

Is FD interest taxable in India? ▼

Yes. FD interest is fully taxable at your income tax slab rate. The bank deducts TDS at 10% if your annual interest exceeds ₹40,000 (₹50,000 for senior citizens). This TDS is not the final tax — it is adjusted against your actual tax liability when you file your ITR. If your total income is below the basic exemption limit, submit Form 15G (below 60 years) or Form 15H (60+) to the bank to avoid TDS deduction.

What is a tax-saving FD? ▼

A tax-saving FD has a 5-year lock-in period and qualifies for deduction under Section 80C up to ₹1.5 lakh per year (Old Regime only). However, the interest earned is still taxable at your slab rate. This makes PPF a better option for many taxpayers because PPF interest is completely tax-free (EEE status) and also qualifies for 80C. Tax-saving FDs do not allow premature withdrawal or loan facility.

What is the penalty for premature FD withdrawal? ▼

Most banks charge a penalty of 0.5% to 1% on the applicable interest rate for premature withdrawal. For example, if the FD rate is 7.10% and you break it early, the bank applies the rate for the actual period held, minus the penalty. Some banks waive the penalty for small FDs or senior citizens. Tax-saving FDs (5-year lock-in) cannot be withdrawn prematurely.

Is FD safe? What happens if the bank fails? ▼

FDs in banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of RBI, up to ₹5 lakh per depositor per bank. This covers both principal and interest. If you have more than ₹5 lakh, consider spreading across multiple banks for full coverage. Corporate FDs (from NBFCs) are not covered by DICGC and carry higher risk.

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