FD Calculator: Maturity, TDS and Premature Closure

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Rules last checked on 11 October 2026: the interest method and premature-withdrawal penalty on State Bank of India's Deposit Rates page (updated 14 September 2026); TDS under section 393(1), Table serial 5(ii), of the Income-tax Act, 2025 (₹50,000, or ₹1,00,000 for a senior citizen, per bank per tax year) and the 20% rate without PAN under section 397(2)(b); 10% TDS on the department's TDS Rates page (updated 8 October 2026); Form 121 from the department's Form 121 FAQs; deposit insurance of ₹5,00,000 from DICGC. No bank rate is built in; you type the one on your receipt.

Short answer

₹1,00,000 at 7% for 5 years, compounded quarterly, matures to ₹1,41,478, which is 7.18% a year. A 444-day deposit earns 4 full quarters and then 79 days of simple interest on the grown balance. TDS of 10% starts only when one bank's interest to you passes ₹50,000 in a tax year (₹1,00,000 if you are 60 or older), but the interest is taxable at your slab either way.

How banks work out FD interest, to the day

Many FD calculators raise (1 + r/4) to the power of four times the years. That works for whole years. For anything else banks do it in steps. State Bank of India publishes its method: a cumulative deposit of six months or more is compounded at the end of each completed quarter, counted date to date from the day you deposit, at the annual rate divided by four. Whatever days are left after the last full quarter earn the rate × days ÷ 365 on the grown balance. Deposits shorter than six months get simple interest for the actual days.

So ₹1,00,000 at 7% for 444 days is 4 full quarters, which takes it to ₹1,07,186, and then 79 days at 7% × 79 ÷ 365, which adds ₹1,624. Maturity is ₹1,08,810. SBI's own online calculator, which raises to a fractional power, shows ₹1,08,807 for the same deposit. On whole years the two agree: ₹1,41,477 on SBI's tool for 5 years at 7%, which drops the paise, and ₹1,41,478 here, which rounds them.

A monthly or quarterly payout FD works differently: it pays the rate ÷ 12 (or ÷ 4) on the deposit for each completed period and never compounds, so it earns less than the same money left in a cumulative FD. Some banks pay monthly interest at a discounted value, a little below the rate ÷ 12; the calculator shows both.

TDS on FD interest from 1 April 2026

Under section 393(1) of the Income-tax Act, 2025 (Table, serial 5(ii)), a bank deducts TDS from interest only when its interest to you in a tax year passes ₹50,000, or ₹1,00,000 if you are a resident aged 60 or more. The limit counts all your deposits at that bank together, not each FD on its own. The rate is 10%, and 20% if the bank does not have your PAN.

On a cumulative FD the interest accrues every year, so the bank deducts TDS each 31 March, not just at maturity. If your savings account does not cover it, the TDS comes out of the deposit, and that money stops earning interest. Form 121 replaced Forms 15G and 15H from the 2026-27 tax year: give it and the bank deducts nothing, but only if the tax on your total income for the year will be nil.

TDS is only an advance on the tax: the interest is income at your slab rate whether or not TDS was cut. A 30% taxpayer owes about 31.2% with cess, so 10% TDS leaves most of the tax still to pay when filing. Someone with no taxable income gets the TDS back as a refund.

Breaking an FD early

Close an FD before maturity and the bank pays the rate it was offering, on your deposit date, for a deposit as long as yours actually ran, less a penalty, instead of the rate you booked. SBI's penalty is 0.50% on deposits up to ₹5 lakh and 1% above that, and a deposit closed within 7 days earns nothing. Type the bank's card rate for that shorter period in "Break it early" and the calculator applies it. On a payout FD the bank has already paid you interest at the higher rate, so it takes the difference back out of the deposit.

Worked examples

₹10 lakh for 3 years, with TDS and a 30% slab

Priya puts ₹10,00,000 in a cumulative FD at 6.5% for 3 years on 11 October 2026. Before tax it matures to ₹12,13,408.

Her interest stays under ₹50,000 in 2026-27 (₹30,728) and in the last part-year, so no TDS there. In 2027-28 and 2028-29 it passes ₹50,000, and the bank deducts ₹6,884 and ₹7,246. With no savings account at that bank, the TDS comes out of the deposit, so she receives ₹11,98,096. The ₹14,130 counts as tax she has paid, and the money taken out early cost her ₹1,181 of interest.

At 30% plus cess the tax on the ₹2,12,226 of interest she actually earns is ₹66,215. TDS covered ₹14,130 of it, so ₹52,085 is still due across her three returns. After tax the deposit earns 4.68% a year.

₹10 lakh paid out monthly for a retired depositor

Mr Das, 64, deposits ₹10,00,000 at 7% for 5 years from 1 November 2026, with interest paid every month. He gets ₹5,833 a month, or ₹5,799 if his bank pays monthly interest at a discounted value. That is ₹70,000 a year, under the ₹1,00,000 limit for senior citizens, so no TDS. A depositor under 60 would have ₹7,000 deducted in each of the four full tax years.

Left to compound, the same deposit would have earned ₹4,14,778 instead of ₹3,50,000 paid out. If he closes it after 2 years and the bank's 2-year rate on the deposit date was 6.75%, the 1% penalty for deposits above ₹5 lakh leaves 5.75%. He has already been paid ₹1,40,000, only ₹1,15,000 was due, so the bank keeps ₹25,000 and returns ₹9,75,000.

Tips and tricks

How we would use it

Questions people ask

How is FD interest calculated in India?

For a cumulative FD of six months or more, banks compound the interest each completed quarter at the annual rate ÷ 4, counting quarters date to date from the deposit date, and pay the rate × days ÷ 365 on the leftover days. Shorter deposits get simple interest for the actual days. ₹1,00,000 at 7% for 5 years comes to ₹1,41,478.

Is TDS deducted on FD interest under ₹50,000?

No. A bank deducts TDS only when its interest to you in a tax year passes ₹50,000, or ₹1,00,000 for a resident senior citizen, counting all your deposits with it. Below that, nothing is deducted, but the interest is still taxable at your slab rate.

What replaced Form 15G and 15H?

Form 121, under section 393(6) of the Income-tax Act, 2025, from the 2026-27 tax year. One form now covers everyone. It stops TDS only if the tax on your total income for the year will be nil.

Do I pay tax on a cumulative FD every year or at maturity?

Banks deduct TDS on the interest accrued each tax year, and that interest appears in your Annual Information Statement every year, so most people report it year by year. Reporting it all in the year of maturity can leave earlier years' TDS unmatched with the income.

What happens if I break an FD early?

The bank pays the rate it offered on your deposit date for the period the money actually stayed, less a penalty, often 0.5% to 1%. A deposit closed within 7 days earns no interest. On a payout FD any extra interest already paid is taken back from the deposit.

Is my FD insured?

DICGC insures deposits in each bank up to ₹5,00,000 per depositor, principal and interest together, across all your accounts at that bank held in the same capacity. Deposits in different banks are insured separately.

Why is my monthly FD interest less than rate ÷ 12?

Some banks pay monthly interest at a discounted value: they take the quarter's interest and pay it in three monthly parts that, with interest on them to the quarter end, add up to it. ₹1,00,000 at 7% pays ₹580 a month that way instead of ₹583.

Written by Bulan Sarkar, who checked the results by hand and against a second public calculator. Use it for planning; it isn't tax or investment advice.

Sources

Post Office Savings Calculator

MIS monthly income, SCSS quarterly interest, NSC and KVP maturity and Time Deposit interest at the Oct to Dec 2026 rates, compared side by side.