RBI Quarterly Compounding Standard • Senior Citizen Bonus

Fixed Deposit (FD) Calculator

Calculate your exact maturity amount, compound interest earned, and Section 194A TDS threshold implications for bank term deposits across India.

Quarterly Compounding Standard•Senior Citizen (+0.50% p.a.)•TDS Threshold Check•100% Free & Private

Deposit Parameters

0ms Local Engine

Depositor Category

Total Deposit Amount

₹

₹10,000₹2.00 L₹20 Lakhs

Interest Rate (% p.a.)

Investment Duration (Years)

Yrs

Compounding Cycle

Maturity Value

₹2,84,349

7.1% p.a.

Total Deposit:

₹2,00,000

Total Interest Earned:

₹84,349

Principal Deposit (70%)Interest Gain (30%)

Annual interest is within the ₹40,000 tax-exempt TDS limit.

How Fixed Deposit Interest Works in Indian Banks

Understanding the RBI quarterly compounding method, senior citizen perks, and Section 194A TDS rules.

The Compound Interest Formula

Per Reserve Bank of India (RBI) directives, interest on domestic term deposits exceeding 6 months is compounded on a quarterly cycle:

A = P × (1 + r / n)^(n × t)

Where:
• P = Principal deposit amount
• r = Annual interest rate (in decimal, e.g. 7% = 0.07)
• n = Number of compounding intervals per year (n = 4 for Quarterly)
• t = Investment tenure in years

Worked Example: 5-Year Deposit

Investing ₹2,00,000 at 7.00% p.a. for 5 years with quarterly compounding:

Principal Deposit (P):₹2,00,000

Compounding Frequency:Quarterly (4 times/yr)

Total Interest Accrued:₹82,956

Maturity Payout:₹2,82,956

TDS Rules on Bank Fixed Deposits (Section 194A)

Under Section 194A of the Indian Income Tax Act, banks deduct 10% Tax Deducted at Source (TDS) if your total interest income across all deposits in a bank exceeds ₹40,000 per financial year (or ₹50,000 for senior citizens aged 60+). If your total taxable income is below the basic exemption threshold, you can submit Form 15G (or Form 15H for seniors) at the beginning of the financial year to prevent TDS deduction.

Senior Citizen Advantage: Most Indian commercial and public sector banks provide a premium of +0.50% p.a. to senior citizens (and up to +0.75% for super senior citizens on special tenures).

Frequently Asked Questions about Fixed Deposits

Essential insights into bank FD returns, taxation, and maturity rules.

How often is interest compounded on Indian bank Fixed Deposits?

In India, interest on fixed deposits is compounded quarterly (every 3 months) following RBI regulations. For short-term deposits under 6 months, simple interest is applied at maturity.

What is the TDS threshold on FD interest?

Under Section 194A, banks deduct 10% TDS if your total annual interest income across branches of the same bank exceeds ₹40,000 for regular individuals or ₹50,000 for senior citizens.

How can I avoid TDS on my Fixed Deposit?

If your estimated total income for the financial year is below the basic tax exemption limit, you can submit Form 15G (for individuals below 60) or Form 15H (for senior citizens aged 60+) to your bank to request zero TDS deduction.

What are Cumulative vs Non-Cumulative Fixed Deposits?

In a Cumulative FD, interest is reinvested and paid out together with the principal at maturity (maximizing compounding). In a Non-Cumulative FD, interest is paid out periodically (monthly, quarterly, or half-yearly) to provide regular cash flow.

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