How is FD maturity calculated with quarterly compounding?

Most Indian banks compound fixed deposit interest quarterly, using the formula M = P × (1 + r/4)^(4×t), where P is principal, r the annual rate and t the tenure in years. A ₹1,00,000 FD at 7% for 1 year grows to ₹1,07,185.90 — not ₹1,07,000 as simple interest would give, because each quarter's interest itself starts earning. Over 5 years the same deposit becomes ₹1,41,478, an effective annual yield of 7.19% versus the quoted 7.00%. This calculator lets you switch between monthly, quarterly, half-yearly and yearly compounding so you can match any bank's exact method.

What is the TDS on FD interest for FY 2025-26?

From 1 April 2025 (Finance Act 2025), banks deduct TDS under Section 194A when total annual interest from that bank crosses ₹50,000 for regular customers and ₹1,00,000 for senior citizens — both raised from the old ₹40,000/₹50,000 limits. The TDS rate is 10% when PAN is available and 20% when it is not. TDS applies to accrued interest on cumulative FDs every financial year, not just at maturity. Interest credited to RD accounts is counted in the same annual total. If your total income is below the taxable limit, submit Form 15G (or 15H for seniors) to avoid TDS altogether.

How does RD maturity work — why is it different from FD?

In a recurring deposit, each monthly instalment earns interest for a different length of time, so the bank compounds every instalment separately at the quarterly rate from the month it is deposited until the end of the tenure. Maturity = sum over all instalments of P × (1 + r/400)^((remaining months)/3). For example, ₹1,000 a month for 12 months at 7% grows to about ₹12,462 — ₹12,000 invested and ₹462 earned. The first instalment works the hardest (a full year of compounding) while the last one earns almost nothing, which is why RD yields are lower than FDs at the same rate.

Do senior citizens get higher FD rates?

Yes — nearly every Indian bank pays 0.40% to 0.60% extra on FDs to residents aged 60 and above, with the standard increment being 0.50%. A 7.00% regular rate becomes 7.50% for seniors; on a ₹10 lakh, 5-year deposit that gap compounds to roughly ₹22,000 extra at maturity. Many banks also offer a special "senior citizen scheme" for 60+ with another 0.10-0.20% on longer tenures, and super-senior rates (80+) at some banks. The senior toggle in this calculator adds 0.50% to your entered rate automatically.

FD or RD — which should I choose?

They solve different problems. An FD suits a lump sum you already have — a bonus, matured deposit or gift — and locks the whole amount at a fixed rate for the full tenure. An RD suits a monthly saver: you build the habit, and each instalment is locked until the end. At the same rate, FD always ends ahead in absolute interest because the entire principal works from day one (₹1.2 lakh as one FD at 7% for a year earns ~₹8,690; the same amount as a ₹10,000 RD earns ~₹4,600). But if the money does not exist yet, an RD is the only disciplined option. The two tabs in this tool let you model both side by side.

What is effective annual yield in FD?

Effective annual yield (or effective annual rate) converts a compounded nominal rate into the true yearly growth of your money. A 7.00% rate compounded quarterly actually grows funds by 7.19% a year; compounded monthly it is 7.23%. Banks advertise the nominal rate but often quote the higher "effective yield" in fine print for longer tenures — always compare using effective yield when choosing between banks with different compounding frequencies. This calculator shows the effective yield for every FD calculation next to the maturity amount.

Can I break my FD or RD early? What are the penalties?

Yes, both can be closed prematurely. For FDs, banks charge a premature-withdrawal penalty of 0.50% to 1.00% off the applicable rate for the period actually completed — e.g., a 7.25% 5-year FD broken after 1 year pays the 1-year rate (say 6.75%) minus the penalty, so about 6.25%. Some banks also levy extra penalty on amount above ₹5 lakh. RDs can be closed anytime; interest is paid at the rate for the completed period minus the same 1% penalty, and unpaid instalments may attract a ₹50-₹100 monthly fee. Sweep-in FDs and 7-day FDs have different rules — check your bank's schedule of charges.

Is my FD/RD calculation data stored anywhere?

No. The entire calculation runs locally in your browser with JavaScript — amounts, rates and tenure inputs never leave your device or reach any server, and the page keeps working offline once loaded. Model your deposits with full privacy, as many times as you like.

FD & RD CALCULATOR — MATURITY | TDS IMPACT | QUARTERLY COMPOUNDING

DEPOSIT AMOUNT (₹)

RATE % P.A.

TENURE

months

COMPOUNDING

Senior citizen +0.50%

TDS ON (interest > threshold)

Sec 194A — Finance Act 2025 ke naye limits (April 1, 2025 se)

MONTHLY INSTALLMENT (₹)

RATE % P.A.

TENURE

months

METHOD

RD me banks quarterly compounding use karte hain — har installment apne deposit month se compound hoti hai.

TDS ON (interest > threshold)

YEAR-BY-YEAR GROWTH

FD vs RD — DONO EK SAATH SAMJHO

Fixed deposits (FD) aur recurring deposits (RD) India ke do sabse trusted savings products hain — dono me rate fix hota hai, tenure fix hota hai, aur capital market ke ups-se-downs se aapka paisa door rehta hai. Farak sirf itna hai ki FD me ek lump sum ek saath jama hota hai, jabki RD me har mahine ek installment jama hoti hai. Is calculator me dono ek hi page pe hain — upar tabs se switch karo, inputs bharo, aur maturity, interest, effective yield aur TDS ka poora hisaab turant milega.

Quarterly compounding ka asli matlab

Indian banks FD interest quarterly compound karti hain — matlab har 3 mahine me interest earn hota hai aur phir wahi interest aage interest kamata hai. Formula: M = P × (1 + r/4)^4×t. ₹1,00,000 @ 7% pe 1 saal me ₹107,185.90 banta hai (simple interest ₹107,000 deta) aur 5 saal me ₹141,478 — jo effective annual yield 7.19% hai. Yahi chhota sa "compounding bonus" lambe tenure me lakhon ka farak ban jata hai, isliye rate compare karte waqt hamesha effective yield dekho, sirf quoted rate nahi.

TDS ab samajhna zaroori hai

1 April 2025 se (Finance Act 2025) bank aapke annual interest par TDS kaat sakti hai agar wo ₹50,000 (general) ya ₹1,00,000 (senior citizens) se zyada ho — pehle ye limits ₹40,000/₹50,000 thi. Rate 10% hai PAN available ho to, aur 20% PAN na hone par. Dhyan do: TDS cumulative FD me har saal accrue hui interest par kat ta hai, maturity ka intezaar nahi karta — isliye calculator tumhe har saal ka TDS alag dikhata hai. Taxable limit ke andar wale Form 15G (ya 15H) submit karke TDS bacha sakte hain. RD ke interest bhi isi annual total me count hote hain.

FD vs RD — side-by-side comparison

Factor	FD (Fixed Deposit)	RD (Recurring Deposit)
Investment	Ek baar lump sum	Har mahine fixed installment
Interest math	Poora principal day-1 se compound hota hai	Har installment alag se — early installments zyada, late kam
Same rate par interest	Zyada (₹1.2L @ 7% 1yr = ~₹8,690)	Kam (₹10K/month @ 7% 1yr = ~₹4,600)
Best for	Bonus, maturity amount, gift — paisa pehle se hai	Monthly saving habit — paisa har mahine aata hai
Senior citizen benefit	+0.50% almost sab banks me	Kuch banks dete hain, standard nahi
Loan/overdraft	90% tak loan milega	90% tak, completed installments par

Typical bank FD rates (2025-26)

Major banks (SBI, HDFC, ICICI, Axis) regular customers ko 1-saal tenure par roughly 6.5%-7.25% de rahe hain, senior citizens ke liye ~0.50% zyada. Rates bank aur tenure ke hisaab se badalte rehte hain — apne bank ka exact rate daalo aur senior toggle on karo. Premature closure par 0.50%-1.00% penalty lagti hai, isliye tenure pehle se soch ke chuno.

Pro tips

Laddering: Ek badi FD ki jagah 3-4 chhoti FDs alag-alag tenure me — liquidity + rate-reset flexibility.
RD vs SIP: RD guaranteed return deta hai (~6.5-7.5%), SIP market-linked hai (historically 10-12% but volatile) — dono ka role alag hai.
Section 80C: 5-saal tax-saver FD principal 80C me claim hota hai, par interest taxable — aur tax-saver FD lock-in hota hai, premature exit nahi.
Effective yield trick: Monthly compounding wali FD quarterly wali se 0.04-0.05% zyada deti hai same rate par — banks ke compounding frequency compare karo.

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