Fixed deposit (FD)
Money deposited with a bank for a fixed term at a fixed interest rate.
Interest is either paid out (monthly or quarterly) or reinvested and paid at maturity; Indian banks compound quarterly. Interest is taxed at your slab rate, and banks deduct TDS when a year's interest is above ₹50,000 (₹1 lakh for senior citizens).
Breaking an FD early usually costs a small penalty on the rate. Deposits are insured up to ₹5 lakh per bank.
Example
₹5 lakh for 3 years at 7%, cumulative: about ₹6.16 lakh at maturity.
Fixed Deposit Calculator
Maturity value and interest for a bank FD — cumulative or with monthly/quarterly payouts.
Related terms
Rules as of tax year 2026-27. Written by the Welthr team; last reviewed on . Not financial advice.