FD Calculation Formulas
Cumulative (Compound Interest):
Maturity = P x (1 + r/n)^(nxt)
Where: r = annual rate, n = compounding freq/year
t = tenure in years
Non-Cumulative (Simple Interest per period):
Interest per period = P x r x (1/n)
Total Interest = P x r x t
(Interest paid out; principal returned at maturity)
Effective Annual Rate (EAR):
EAR = (1 + r/n)^n − 1
Example: 7% quarterly compounding
EAR = (1 + 0.07/4)^4 − 1 = 7.19%
TDS:
Applicable if interest > ₹40,000/year (₹50,000 for seniors)
TDS rate = 10% on excess interest
Top FD Rates in India (Indicative, 2024)
SBI: 5.1–7.1% (1–10 yrs) · HDFC: 4.5–7.4% · ICICI: 4.75–7.4% · Axis: 3.5–7.35% · Small Finance Banks (SFBs): 7.5–9.5% (higher risk, DICGC insured up to ₹5L)
FAQs
Is FD interest taxable?
Yes. FD interest is added to your total income and taxed as per your income tax slab. If annual interest from all FDs at a bank exceeds ₹40,000 (₹50,000 for senior citizens), the bank deducts TDS at 10%. If your total income is below the taxable limit, submit Form 15G (below 60 yrs) or Form 15H (60+ yrs) to the bank to prevent TDS deduction.
What is the DICGC insurance limit on FDs?
The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures deposits up to ₹5 lakh per depositor per bank (across all accounts including savings, FD, RD). This covers principal + interest. For amounts above ₹5L, consider spreading across multiple banks or choosing only scheduled commercial banks.
