Mutual Fund Compare

FD calculator with tax and inflation

Written and reviewed by Omm · Last reviewed · General information, not investment advice

A fixed deposit’s headline rate is not what you earn. Interest is taxed, and prices keep rising. Enter the amount, rate and term, your tax rate and expected inflation to see the maturity amount and your real return after both.

Between 1000 and 1000000000

%

Between 0 and 20

years

Between 1 and 30

Interest is added
Tax and inflation
%

Between 0 and 50

%

Between 0 and 30

After tax and inflation your money grows its buying power by 0.22% a year.

Maturity amount

₹1,41,478

Interest earned

₹41,478

Tax on the interest

₹12,443

Maturity amount after tax

₹1,29,034

Yearly yield with compounding

7.19%

Yearly return after tax

5.23%

Yearly return after tax and inflation

0.22%

Maturity amount (after tax) in today’s money

₹1,01,102

Year 1Year 5
ValueDeposited
Year-by-year breakdown
YearValue
1₹1,07,186
2₹1,14,888
3₹1,23,144
4₹1,31,993
5₹1,41,478

How it works

Maturity = P × (1 + r ÷ n)^(n × t) where r = yearly rate, n = times interest is added a year, t = years. After tax: interest × (1 − tax rate). Real return = (1 + after-tax return) ÷ (1 + inflation) − 1

Banks usually add interest to a cumulative fixed deposit every quarter, which is why the yearly yield is a little higher than the quoted rate. Choose how often interest is added to match your deposit.

The interest is added to your income and taxed at your slab rate. The calculator takes your tax rate off all the interest earned. If your income is low enough that you pay no tax, set the tax rate to zero. Banks may also deduct tax at source when interest crosses a limit, which is not the same as the tax you finally owe.

Inflation lowers what the money will buy. The real return is how fast your buying power grows after tax and inflation; when it is below zero, the money buys less at the end than at the start even though the amount is bigger. The calculator shows the maturity amount after tax in today’s money so you can see this.

The rate, tax rate and inflation are all assumptions you enter. Early withdrawal penalties and changes in rates are not included.

Example. ₹1,00,000 in a 5-year deposit at 7%, with interest added quarterly, grows to about ₹1,41,478. Taxed at 30%, you keep ₹29,034 of the ₹41,478 interest, a return of about +5.23% a year. With 5% inflation, the real return is about +0.22% a year, and the ₹1,29,034 you end up with is worth about ₹1,01,102 in today’s money.

Read the guide: Fixed deposit returns after tax and inflation: what you really earn.

Frequently asked questions

How is the maturity value of a fixed deposit calculated?

Maturity = P × (1 + r ÷ n)^(n × t), where P is the amount, r the yearly rate, n how many times interest is added in a year and t the years. Banks commonly add interest quarterly.

Is FD interest taxable?

Yes. The interest is added to your income and taxed at your slab rate. Banks may deduct tax at source if the interest is above a limit, but what you owe depends on your total income. The calculator takes the tax rate you enter off all the interest.

What is the real return on an FD?

It is the return after tax and after inflation. If inflation is higher than your after-tax return, your money loses buying power even though the rupee amount grows.

Why is the effective yield higher than the quoted rate?

Because interest is added several times a year and then earns interest itself. A 7% rate with quarterly compounding gives an effective yearly yield of about 7.19%.

What is TDS on FD interest?

Banks deduct tax at source (TDS) when the interest they pay you in a financial year crosses a limit. Since April 2025 the limit has been reported as ₹50,000 for most depositors and ₹1 lakh for senior citizens, with tax deducted at 10% (20% if the bank does not have your PAN). TDS is not the final tax: the interest is still added to your income and taxed at your slab rate, and the TDS is adjusted when you file your return. Confirm the current limit with your bank.

How can I avoid TDS if my income is below the taxable limit?

If your tax for the year will be nil, you can give the bank a self-declaration so that it does not deduct TDS. This was Form 15G (Form 15H for senior citizens) under the earlier law; under the Income-tax Act, 2025 it is reported to be a single form, Form 121. Ask your bank which form it accepts, and give it at the start of each financial year.

Should I choose a cumulative FD or a payout FD?

A cumulative FD adds the interest to the deposit and pays everything at maturity, so it earns interest on interest; this calculator shows that case. A payout FD pays the interest every month or quarter, which suits people who need income, but the total earned is lower because the interest is not reinvested.

Is my money in a bank FD insured?

Deposits in a bank are insured by DICGC, a subsidiary of RBI, up to ₹5 lakh per depositor per bank, covering principal and interest together. Amounts above that are not covered if the bank fails.

Sources

Rules, rates and definitions on this page come from these official sources. Check the current position there before you decide.

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