Which bank gives the highest FD interest rate in 2025?

Small finance banks like Unity SFB, Suryoday SFB, and ESAF typically offer the highest rates (8.5–9.5%). Among large banks, Yes Bank and IndusInd often offer above-average rates. Always compare on Moneykar's FD calculator.

What is the FD maturity formula?

For cumulative FD: M = P × (1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency per year, t is years.

Is FD better than RD?

FD suits lump sum investors who want to park a fixed amount. RD suits those who want to invest monthly. At the same rate and period, FD typically returns more than RD because the entire principal earns interest from day one.

Can NRIs invest in FD in India?

Yes. NRIs can invest in NRE FD (tax-free in India, repatriable), NRO FD (taxable, partially repatriable), or FCNR FD (in foreign currency, fully repatriable). NRE FD rates often match domestic FD rates.

TOOLS April 25, 2026 · 6 min read

India Fixed Deposit Calculator — FD Returns, Interest & Tax Explained

Q: Is FD interest taxable in India?

Yes. FD interest is added to your income and taxed at your slab rate. Banks deduct TDS at 10% if interest exceeds ₹40,000/year (₹50,000 for senior citizens). If your total income is below the taxable limit, submit Form 15G/15H to avoid TDS.

By Moneykar Team ·Finance Education · LinkedIn

Calculate your fixed deposit maturity amount, compare FD interest rates across tenures, and understand the tax impact on FD returns — all using Moneykar's free FD calculator.

⚠️ Educational content only. This article is for informational purposes and does not constitute financial advice. Consult a SEBI-registered advisor before making investment decisions. Full disclaimer →

Fixed deposits remain one of the most popular savings instruments in India — and for good reason. They offer guaranteed returns, capital safety (up to ₹5L per bank under DICGC insurance), and predictable income. A FD calculator helps you compare banks, tenures, and compounding frequencies before locking in your money.

What an FD calculator tells you

Enter three inputs — principal amount, interest rate, and tenure — and the calculator returns:

Maturity amount — what you receive at the end of the FD period.
Total interest earned — the rupee value of your return.
Effective annual yield — useful for comparing FDs that compound at different frequencies (quarterly vs annually).

→ Open FD Calculator

How FD interest is calculated

Banks compound FD interest quarterly for most cumulative deposits. The formula is:

M = P × (1 + r/4)^(4×t)

For a ₹5 lakh FD at 7.5% for 3 years with quarterly compounding:
M = 5,00,000 × (1 + 0.075/4)^12 = ₹6,25,963 (approximately)

FD vs SIP: which is right for you?

Factor	FD	SIP (Equity)
Return	6.5–9.5% (fixed)	10–15% (historical, not guaranteed)
Risk	None (DICGC insured up to ₹5L)	Market risk
Liquidity	Premature withdrawal with penalty	Can exit anytime (except ELSS)
Tax on returns	Added to income, taxed at slab rate	LTCG 12.5% above ₹1.25L
Best for	Emergency fund, capital preservation	Wealth creation, 5+ year goals

Tax on FD: what you actually take home

FD interest is fully taxable as "Income from Other Sources." If you're in the 30% tax bracket, your 8% FD gives you an effective post-tax return of only 5.6%. This makes tax-efficient instruments like PPF, ELSS, or debt mutual funds (for long-term) worth considering for wealth creation beyond emergency reserves.

Senior citizens get an additional deduction of up to ₹50,000/year on FD interest under Section 80TTB, making FDs more attractive for retirees.

How to choose the right FD tenure

1–2 year FDs — for short-term goals or parking money until a decision is made.
3–5 year FDs — often offer the best rates; suitable for medium-term goals.
Tax-saving FD (5 years) — qualifies for Section 80C deduction (up to ₹1.5L/year) but has a mandatory 5-year lock-in and interest is taxable.

Frequently Asked Questions

Which bank gives highest FD interest rate in 2025?

Small finance banks like Unity SFB, Suryoday SFB typically offer 8.5–9.5%. Among scheduled commercial banks, Yes Bank and IndusInd often lead. Always check the latest rates directly as they change frequently.

Is FD interest taxable?

Yes — FD interest is added to your income and taxed at your applicable slab rate. Banks deduct TDS at 10% if interest exceeds ₹40,000/year (₹50,000 for seniors). Submit Form 15G/15H if your income is below the taxable limit.

How much interest will I earn on ₹1 lakh FD per month?

A ₹1L FD at 8% earns approximately ₹667/month (₹8,000/year). For monthly interest payout, choose a non-cumulative FD — note that payout FDs often have slightly lower effective rates than cumulative ones.

Can I break an FD before maturity?

Yes. Banks charge a premature withdrawal penalty (typically 0.5–1% reduction on the applicable interest rate). Some banks offer penalty-free partial withdrawal on large FDs.

Is FD safe if the bank fails?

Deposits up to ₹5 lakh per depositor per bank are insured by DICGC. For amounts beyond ₹5L, you carry the bank's credit risk. Splitting FDs across multiple banks increases insurance coverage.

Use FD Calculator →

Moneykar Team

Independent Finance Education · 15+ yrs Industry Experience

Content generated with AI and reviewed for accuracy by our finance team. About Moneykar → · LinkedIn

🤖 AI Disclosure: This article was produced using AI assistance and reviewed by the Moneykar team for factual accuracy and editorial standards. All content is for educational purposes only — not financial advice.

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