FD Calculator
Fixed deposit interest is taxed every year as it accrues, not at maturity, even though you receive nothing until the deposit matures. This FD calculator applies that year by year, handles TDS at the point the bank actually deducts it, and then restates the maturity amount in today's money.
Where it goes
- What's actually left₹1.01 lakh
- Tax paid when you file−₹6,579
- Inflation at 6%−₹34,271
Worth knowing
How is the tax on this worked out?
Your other income puts you in a bracket, and this deposit's interest is stacked on top of it — so it is taxed at 15.6%, cess included. There is no separate lower rate for interest. Because we work from your income rather than a slab you pick, this also accounts for the rebate: below ₹12 lakh of total income the answer is nothing at all.
When is the tax on this actually paid?
Every year as the interest accrues — not at maturity, even though you do not receive a rupee until then. At your slab, ₹6,579 of the ₹42,175 interest goes in tax.
Will the bank deduct TDS?
No — your yearly interest stays under the threshold, so nothing is withheld. That is not the same as tax-free: the full liability is still yours, payable when you file.
Is 7.1% a good rate?
At your slab it is really 5.99% after tax. Against 6% inflation, that is what decides whether this deposit gains or loses purchasing power.
Compared with everything elseShow the tableHide
Over 15 years, Equity mutual fund keeps the most — +5.42% a year in real terms.
₹1.00 lakh a year into each, for 15 years, on ₹15.00 lakh of other income — a 15.6% rate on interest — and 6% inflation. The return is what you actually keep, after tax and after inflation.
| Where | Rate | Tax | You’d have | Real return |
|---|---|---|---|---|
| Equity mutual fund | 12.00% | Capital gains | ₹17.05 lakh | +5.42% |
| PPF | 7.10% | Completely tax-free | ₹11.32 lakh | +1.03% |
| NSC | 7.70% | Taxed at your slab | ₹10.96 lakh | +0.41% |
| Fixed deposit | 7.10% | Taxed at your slab | ₹10.54 lakh | +0.09% |
| Sukanya SamriddhiLocks your money in for 21 years | 8.20% | Completely tax-free | — | — |
Over 15 years, Equity mutual fund keeps the most — +5.42% a year in real terms — which is a different order from the one the headline rates suggest, because tax and lock-in do most of the deciding.
Understanding this calculator
A fixed deposit is the most popular financial product in India and the one whose return is most often misread. The bank quotes a rate. What you keep is a different number, and the gap is not small.
Two deductions, not one
Interest on a deposit is taxed as income at your slab rate — not at the flat rates that apply to shares and equity funds. On top of that the bank withholds tax at source once interest crosses ₹50,000 in a year, or ₹1,00,000 for a senior citizen.
Then inflation takes its share of what is left. The arithmetic is unforgiving, and this is the comparison the calculator above exists to make.
| A 7.5% fixed deposit | Effective |
|---|---|
| Headline rate | 7.50% |
| After tax at a 30% slab | 5.16% |
| Against 6% inflation | negative in real terms |
Taxed before you receive it
The detail that catches people on a multi-year deposit: interest is taxed every year as it accrues, not when the deposit matures. You owe tax on money you have not been paid yet and cannot withdraw.
That is why this calculator applies tax year by year rather than once at the end. A model that taxes the whole gain at maturity produces a higher and wrong answer, because it lets money compound that the tax authority had already taken.
TDS is not the tax
The 10% the bank withholds is an advance against your liability, not a settlement of it. If you are in the 30% band you still owe the balance when you file. If your total income is below the taxable threshold you can reclaim what was withheld.
Treating the deducted amount as the tax paid is a common route to an unexpected bill — and remember the 4% cess, which makes a 30% slab cost 31.2% in practice.
What a fixed deposit is genuinely good at
None of this makes deposits a bad product. It makes them a product with a specific job, and the job is certainty rather than growth.
- **Money you will need on a known date.** A deposit maturing when you need it cannot have fallen 30% that month. Nothing in equity can promise that.
- **An emergency fund.** The return matters far less than the fact that the money is there and intact.
- **Deposit insurance.** Bank deposits are insured up to ₹5 lakh per depositor per bank, which is a real protection no market product offers.
The mistake is not using deposits. It is using them for a twenty-year goal, where a return that is negative after tax and inflation compounds into a serious shortfall — while feeling safe the entire time.
Before you commit
Two things the calculator does not model. Breaking a deposit early usually costs a penalty of around one percentage point on the rate, applied to the whole period rather than the remainder. And when a deposit matures, you reinvest at whatever rate exists then — a five-year deposit at today's rate says nothing about what the next five years will pay.
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Tax rules applied as of 2026-Q2, last verified against official sources on 2026-08-23. This calculator does arithmetic on the figures you enter — it is not investment advice, not a recommendation, and not a forecast. All calculators