Fixed Deposit Calculator
Investment Results
Total Invested: $0
Total Returns: $0
Final Amount: $0
CAGR: 0%
Inflation-adjusted Investment Results
Inflation-adjusted Returns: $0
Inflation-adjusted Final Amount: $0
Inflation-adjusted CAGR: 0%
Understanding Fixed Deposit Calculator Parameters
| Parameter | Description |
|---|---|
| Initial Deposit | Principal amount invested at the start of the fixed deposit |
| Investment Period | Time duration for which the amount will remain invested with the financial institution |
| Compounding Frequency | Number of times interest is calculated and added to the principal per year |
| Interest Rate | Annual percentage yield offered by the financial institution |
| Inflation Rate | Annual rate at which the general price level of goods and services is expected to rise, reducing purchasing power |
| CAGR | Annualized rate of return that represents the constant growth rate over the investment period |
What is a Fixed Deposit?
A Fixed Deposit (FD) is a low-risk investment where you deposit a lump sum with a bank/NBFC for a fixed tenure at predetermined interest rates. Offers capital protection and predictable returns. Interest can be compounded quarterly/annually or paid out monthly, depending on the scheme.
Interest Calculation Methods
Two primary options:
- Cumulative: Interest compounded quarterly/annually
- Non-Cumulative: Monthly/quarterly interest payouts
Cumulative FDs typically yield higher returns due to compounding effect.
Safety Features
FDs are considered low-risk because:
- Insured up to ₹5 lakh per bank (DICGC)
- Fixed returns unaffected by market fluctuations
- Regulated by RBI for banks
Credit risk varies between banks and NBFCs.
Liquidity Considerations
Key features:
- Premature withdrawal penalties (0.5-1% typically)
- Loan against FD (up to 90% value)
- Auto-renewal options available
Always check penalty clauses before investing.
Tax Implications
FD interest is taxable:
- TDS deducted if interest exceeds ₹40,000/year (₹50,000 for seniors)
- Taxed as 'Income from Other Sources'
- 5-year tax-saving FDs have lock-in but offer deductions
Form 15G/H can prevent TDS if eligible.
Senior Citizen Benefits
Special FD features:
- 0.25-0.75% higher interest rates
- Higher TDS threshold
- Flexible payout frequencies
- Special tenure options
Available for investors aged 60+ years.
Reinvestment Strategies
Maximize returns through:
- Laddering multiple FDs with different tenures
- Combining cumulative and payout FDs
- Splitting deposits to stay under insurance limits
- Rate hike anticipation strategies
Inflation Considerations
FDs may not always beat inflation:
- Current average inflation: 5-6%
- Post-tax returns often lower
- Use step-up deposits to offset
Best for short-term goals or capital preservation.
Historical Returns Comparison
10-year analysis (2013-2023):
| Bank FDs | 6.5-7.5% CAGR |
| Corporate FDs | 7.5-9% CAGR |
| Tax-Saving FDs | 6-7% CAGR + Tax Benefits |
*Rates vary by institution and economic conditions