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⚠️ Calculations shown are approximate and for illustration purposes only.
Explore FD features, tax implications, safety benefits, and optimization strategies for guaranteed returns.
Where P = Principal, r = Interest Rate, n = Compounding frequency, t = Years
Step-by-step example (₹1,00,000 at 6.5% for 3 years):
FDs offer guaranteed returns with capital protection. Unlike market-linked investments, your principal is safe and returns are predetermined at the time of booking.
Cumulative FDs reinvest interest quarterly for higher returns. Non-cumulative FDs pay regular interest monthly, quarterly, or yearly — ideal for income needs.
FD interest is taxable as per your income tax slab. TDS @ 10% is deducted if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).
Senior citizens (60+ years) get 0.25% to 0.75% higher interest rates and higher TDS exemption limit of ₹50,000 annually instead of ₹40,000.
Early withdrawal is allowed but attracts penalty (usually 0.5% to 1%) and reduced interest rates as per bank's policy. Plan your liquidity needs accordingly.
Bank FDs are insured up to ₹5 lakh per depositor per bank by DICGC, providing additional safety to your investment beyond the bank's guarantee.
An FD is a deposit where you invest a lump sum for a fixed tenure at a fixed interest rate, earning predictable returns.
Cumulative FDs compound interest quarterly. Non-cumulative FDs pay periodic interest (monthly, quarterly, or yearly).
Yes, but premature withdrawal reduces your interest and may attract a penalty based on the bank’s rules.
Yes. Banks typically offer 0.25%–0.75% higher interest rates for senior citizens.
Cumulative FDs generally offer the highest returns since interest is reinvested quarterly, boosting compounding.
Most banks allow auto-renewal. The new FD starts at the prevailing interest rate on the renewal date.