FD Calculator India
2026

At 6.5% FD rate and 30% tax slab, your post-tax return is 4.55%. With 6% inflation, the REAL return is -1.45%. You are losing purchasing power every year. At the 20% slab, real return is 0.2% — barely positive. Only at the 0% slab (income below ₹2.5L or rebate-eligible) does an FD give a meaningful 0.5% real return. This is why FDs work for short-term parking, not long-term wealth building.

TDS at 10% kicks in when aggregate FD interest across ALL your FDs in ONE bank exceeds ₹50,000/year (₹1,00,000 for senior citizens, raised in Budget 2025). Without PAN, TDS is 20%. TDS applies on accrued interest — even if your FD is cumulative and you haven't received the payout. Submit Form 15G (below 60) or Form 15H (60+) at the start of the financial year if your total income is below taxable limit to avoid TDS.

DICGC insures up to ₹5 lakh per depositor per bank — covering principal + interest combined. This applies to ALL RBI-regulated banks: PSU, private, SFBs, RRBs. It does NOT cover corporate FDs. Strategy: spread deposits across multiple banks, each under ₹5 lakh. If a bank fails, DICGC pays the liquidator within 2 months. Even small finance banks have the same ₹5 lakh DICGC cover as SBI.

Cumulative: interest compounds and pays at maturity — higher total returns. Best for wealth building. Non-cumulative: interest paid monthly/quarterly — no compounding benefit. Best for retirees who need regular income. On ₹10 lakh at 7% for 5 years: cumulative gives ₹14.15 lakh, non-cumulative (quarterly payout) gives ~₹13.50 lakh total. That's ₹65,000 difference from compounding alone.

Two hits: (1) interest rate drops to what applies for actual holding period (e.g., you held 18 months but booked at 3-year rate — you get the 1-year rate instead), (2) additional 0.5-1% penalty deducted from that reduced rate. SBI charges 0.5% (up to ₹5L) and 1% (above ₹5L). HDFC, Axis charge flat 1%. Your principal is never affected. Alternative: take a loan against FD (1-2% above FD rate) instead of breaking it.

SFBs need deposits to fund their lending operations in underserved retail/MSME segments. They cannot rely on large corporate deposits like big banks. To attract retail deposits, they offer 1-1.5% higher FD rates (7.5-8.5% vs 6.5% at SBI). All SFBs are RBI-regulated with the same ₹5 lakh DICGC insurance as SBI. The risk: SFBs are smaller, so keep each deposit under ₹5 lakh.

Split your deposit across multiple tenures: e.g., ₹10 lakh into 5 FDs of ₹2 lakh each (1, 2, 3, 4, 5 years). Every year one FD matures — giving you liquidity. Reinvest into a new 5-year FD. Benefits: (1) annual access to funds without penalty, (2) rate averaging across interest rate cycles, (3) spread across banks for DICGC optimization. Warning: don't include tax-saving FDs in the ladder — they have a mandatory 5-year lock-in.

On ₹10 lakh at 7% for 10 years: annual compounding gives ₹19.67 lakh, quarterly gives ₹20.02 lakh, monthly gives ₹20.10 lakh. That's ₹42,510 more with monthly vs annual compounding. Most Indian banks compound quarterly. The difference matters more at higher amounts and longer tenures. For 1-2 year FDs on ₹1 lakh, the difference is only a few hundred rupees — negligible.

For the 30% tax bracket: PPF at 7.1% (EEE — tax-free interest) has an effective pre-tax yield of ~10.1%, beating any taxable FD. SCSS at 8.2% is best for senior citizens (quarterly payouts, but interest is taxable). Tax-saving FD at 6.5-7% is the weakest option — interest fully taxed at slab rate and 5-year lock-in is same as SCSS. Verdict: PPF for long-term, SCSS for senior citizen income, FD only as last resort.

Corporate FDs have NO deposit insurance (no DICGC). If the company defaults, your entire principal is at risk — recovery can take years. They offer 1-2% higher rates (e.g., Bajaj Finance 7.4% vs SBI 6.5%). Only consider AAA-rated corporate FDs (CRISIL/ICRA rated) and limit exposure to 5-10% of your debt allocation. After the DHFL, IL&FS defaults, corporate FDs carry meaningful credit risk that the extra 1-2% may not compensate for.