How is FD interest calculated?

For compound interest FD (most bank FDs): A = P × (1 + r/n)^(n×t), where P=principal, r=annual rate, n=compounding frequency, t=tenure in years. For quarterly compounding (most Indian banks), n=4.

Which bank has the highest FD rate in India 2026?

As of 2026, small finance banks like Unity SFB, Suryoday SFB, and ESAF SFB offer the highest FD rates (8.5–9.5%). Among large banks, HDFC, SBI, and ICICI offer 6.5–7.5%. Senior citizens get 0.25–0.5% extra in most banks.

Is FD interest taxable?

Yes. FD interest is fully taxable as per your income tax slab. If interest exceeds ₹40,000 per year (₹50,000 for senior citizens), banks deduct TDS at 10%. You can submit Form 15G/15H if your total income is below taxable limit.

FD Calculator India 2026 — Fixed Deposit Returns

FD Details

Principal Amount

₹

Interest Rate (p.a.)

Tenure (Months)

24 months

Compounding Frequency

Depositor Type

Maturity Amount

^₹5.74L

Invested Amount

₹5.0L

Est. Returns

₹74,026

Total Value

₹5.74L

FD Interest Rates — Top Banks India 2026

Bank	1 Year	2 Years	5 Years	Senior Citizen Extra
SBI	6.80%	7.00%	6.50%	+0.50%
HDFC Bank	6.60%	7.00%	7.00%	+0.50%
ICICI Bank	6.70%	7.00%	7.00%	+0.50%
Axis Bank	6.70%	7.10%	7.00%	+0.50%
Kotak Bank	7.10%	7.10%	6.20%	+0.50%
Unity SFB	8.50%	8.75%	8.50%	+0.50%
Bajaj Finance (NBFC)	7.85%	8.05%	7.95%	+0.25%

Bank

1 Year

2 Years

5 Years

Senior Citizen Extra

SBI

6.80%

7.00%

6.50%

+0.50%

HDFC Bank

6.60%

7.00%

+0.50%

ICICI Bank

6.70%

7.00%

+0.50%

Axis Bank

6.70%

7.10%

7.00%

+0.50%

Kotak Bank

7.10%

6.20%

+0.50%

Unity SFB

8.50%

8.75%

8.50%

+0.50%

Bajaj Finance (NBFC)

7.85%

8.05%

7.95%

+0.25%

*Rates are indicative as of April 2026. Verify with the bank/NBFC before booking. NBFC FDs are not covered by DICGC insurance.

FD vs SIP — Which is Better for You?

Feature	Fixed Deposit (FD)	SIP (Equity Mutual Fund)
Returns	6.5–9% (fixed)	10–15% (variable, historical)
Risk	Zero (bank FD insured up to ₹5L)	Market risk
Liquidity	Penalty on early withdrawal	Can redeem anytime (equity funds)
Tax	Fully taxable as income	10% LTCG above ₹1L (1yr+)
Ideal For	Short-term, safe parking	Long-term wealth creation

Feature

Fixed Deposit (FD)

SIP (Equity Mutual Fund)

Returns

6.5–9% (fixed)

10–15% (variable, historical)

Risk

Zero (bank FD insured up to ₹5L)

Market risk

Liquidity

Penalty on early withdrawal

Can redeem anytime (equity funds)

Tax

Fully taxable as income

10% LTCG above ₹1L (1yr+)

Ideal For

Short-term, safe parking

Long-term wealth creation

📈 Compare with SIP: Use our SIP Calculator to see how much more wealth a ₹5 lakh SIP (split monthly) can create vs a ₹5L FD over 10 years.

Tax on FD Interest — What You Must Know

FD interest is added to your total income and taxed at your applicable income tax slab rate.

Banks deduct TDS at 10% if interest in a financial year exceeds ₹40,000 (₹50,000 for senior citizens).

If your total income is below the taxable limit, submit Form 15G (below 60 years) or Form 15H (senior citizens) to avoid TDS deduction.

For a ₹5L FD at 7% for 5 years in the 30% tax slab: you pay ₹52,500+ in taxes on interest, making the effective post-tax return only ~4.9%.

This is why equity SIP (with 10% LTCG tax after ₹1L exemption) is significantly more tax-efficient for long-term goals.

Frequently Asked Questions

Is my FD safe? What is DICGC insurance?

Bank FDs are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation) up to ₹5 lakh per bank per depositor. This covers principal + interest combined. For NBFC FDs (like Bajaj Finance), there is no DICGC insurance, so they carry higher risk despite higher rates.

Can I break FD before maturity?

Yes, most banks allow premature withdrawal with a penalty of 0.5–1% reduction in the applicable interest rate for the period held. Some tax-saver FDs (5-year lock-in) cannot be broken before maturity.

What is a cumulative vs non-cumulative FD?

Cumulative FD: interest compounds and is paid at maturity (our calculator shows this). Non-cumulative FD: interest is paid out monthly, quarterly, or annually — useful for regular income. Cumulative FDs grow faster due to compounding.

👨‍💼

CalcBharat.com Finance Team

Banking & Investment Experts

FD interest rates sourced from bank websites and verified as of April 2026. Rates change frequently — always verify before booking. Last updated: April 2026.

Free FD CalculatorIndia 2026

🏦 FD Details

FD Interest Rates — Top Banks India 2026

FD vs SIP — Which is Better for You?

Tax on FD Interest — What You Must Know

Frequently Asked Questions

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