Is FD interest taxable in India?

Yes. FD interest is fully taxable as per your income slab under 'Income from Other Sources'. Banks deduct TDS at 10% if interest exceeds ₹40,000 per year (₹50,000 for senior citizens).

FD & RD Calculator

Q: How is FD maturity value calculated?

FD maturity value = P × (1 + r/4)^(4×t), where P is the principal, r is the annual interest rate, and t is the tenure in years, assuming standard quarterly compounding.

Calculate your Fixed Deposit or Recurring Deposit maturity value with quarterly compounding.

Deposit Type

Fixed Deposit (FD)

Recurring Deposit (RD)

Lumpsum Deposit Amount ₹1,00,000

₹

Interest Rate (Annual) 7%

Tenure 36 Months

₹0

Maturity Value

Total Deposited₹0

Interest Earned₹0

Effective Annual Yield0%

How FD & RD Interest Is Calculated

Most Indian banks compound Fixed Deposit interest quarterly. The formula is:

FD Maturity = P × (1 + r/4)^(4×t), where P = principal, r = annual interest rate (as a decimal), t = tenure in years.

Recurring Deposits work differently — you deposit a fixed amount every month, and each instalment earns interest for the remaining tenure, compounded quarterly on the accumulated balance. This calculator simulates month-by-month deposits with quarterly compounding to give an accurate RD maturity estimate.

📢 Typical FD/RD Interest Rates (2026)

Bank Type	General Public	Senior Citizens
Large Public Sector Banks	6.5% – 7.25%	7.0% – 7.75%
Private Banks	6.75% – 7.5%	7.25% – 8.0%
Small Finance Banks	7.5% – 8.5%	8.0% – 9.0%

Rates vary by bank and tenure, and change periodically with RBI repo rate movements. Always check the current rate on your bank's official website before booking a deposit.

FD vs RD — Which Should You Choose?

	Fixed Deposit	Recurring Deposit
Best for	Investing a lumpsum you already have	Building savings discipline from monthly income
Minimum amount	Usually ₹1,000 – ₹10,000	Usually ₹100 – ₹500/month
Interest earned	Higher, since full amount earns interest from day one	Lower, since each instalment earns interest only from its deposit date
Premature withdrawal	Allowed with penalty (0.5-1% rate cut)	Allowed with penalty, some banks disallow partial withdrawal

Tax Rules on FD & RD Interest

Fully taxable: FD/RD interest is added to your total income and taxed at your slab rate under "Income from Other Sources" — there's no special lower rate.
TDS: Banks deduct 10% TDS if annual interest exceeds ₹40,000 (₹50,000 for senior citizens) across all deposits with that bank. Submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.
5-Year Tax-Saving FD: A special FD with a 5-year lock-in qualifies for Section 80C deduction (Old Regime only) up to ₹1.5 lakh — but the interest earned is still fully taxable.
Report even without TDS: You must declare all FD/RD interest in your ITR even if no TDS was deducted — banks report this to the IT Department via Form 26AS/AIS.

FD Maturity = P × (1 + r/4)^(4×t), where P is your deposit, r is the annual interest rate, and t is the tenure in years — assuming standard quarterly compounding used by most Indian banks.

Yes, FD and RD interest is fully taxable at your income slab rate. Banks deduct 10% TDS if interest exceeds ₹40,000/year (₹50,000 for senior citizens), but you must still declare the full interest in your ITR.

Yes, most banks allow premature withdrawal, but typically apply a penalty of 0.5% to 1% lower interest than the rate applicable for the period actually held.

A regular FD has flexible tenure and no tax benefit. A tax-saving FD has a mandatory 5-year lock-in and qualifies for Section 80C deduction up to ₹1.5 lakh (Old Regime only) — but the interest earned is still fully taxable in both cases.

Yes, most banks offer an additional 0.25% to 0.75% interest rate to senior citizens (60+ years) on both FD and RD compared to general public rates.

Yes, deposits up to ₹5 lakh per depositor per bank (including principal and interest) are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation), a subsidiary of the RBI.

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Interest rates shown are illustrative ranges as of 2026 and vary by bank, tenure and deposit amount. This calculator provides an estimate only and is not a guarantee of actual returns. Please confirm current rates with your bank before investing.

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