Which bank gives highest FD interest rate in India 2026?

Small Finance Banks offer the highest FD rates in India (up to 9%). Top options include Unity Small Finance Bank (9.0%), Equitas (8.25%), and AU Small Finance Bank (8.0%). Senior citizens get an additional 0.5% bonus.

Is FD interest taxable in India?

Yes, FD interest is fully taxable as 'Income from Other Sources'. TDS at 10% is deducted if interest exceeds ₹40,000/year (₹50,000 for senior citizens). Submit Form 15G/15H if total income is below taxable limit.

What is the difference between cumulative and non-cumulative FD?

In Cumulative FD, interest is compounded and paid at maturity, giving higher returns. In Non-cumulative FD, interest is paid monthly/quarterly/yearly, suitable for regular income needs.

Can I break FD before maturity?

Yes, but you'll face a penalty of 0.5-1% on the applicable interest rate. Some banks may also reduce the rate to the one applicable for the period the FD was held.

FD Calculator

Q: What is FD?

A Fixed Deposit (FD) is a safe investment where you deposit a lump sum with a bank for a fixed tenure at a guaranteed interest rate. Interest is compounded quarterly. Senior citizens get 0.5% higher rates.

⚠️ Important Legal Notice

Rates Vary: FD interest rates vary by bank, deposit amount, tenure, and customer category (regular/senior citizen).
TDS Applicable: Interest income above ₹40,000 (₹50,000 for seniors) is subject to TDS. Tax implications vary by individual.
Not Financial Advice: This calculator provides indicative estimates only. Verify actual rates with your bank.

A Fixed Deposit (FD) is a safe investment where you deposit a lump sum with a bank for a fixed tenure at a guaranteed interest rate. Interest is compounded quarterly. Senior citizens get 0.5% higher rates. FD interest is fully taxable.

Deposit Amount (₹)

Interest Rate (%)

Tenure (Years)

Maturity Amount

Principal Invested -

Interest Earned -

⚠️ Tax Note

FD interest is taxable as per your income slab. Consider tax-saving FDs for Section 80C benefits.

Strategic Next Steps

Systematic Savings

Don't have a lump sum? Try a Recurring Deposit instead.

Go to RD Calculator →

Be Tax Efficient

Debt funds can offer better post-tax returns due to deferred taxation.

Compare FD vs Debt Fund →

The Ultimate Guide

Return to the hub to see where FDs fit in your wealth journey.

Back to Financial Guide Hub →

📋 Assumptions Used v1.0

View full assumptions changelog →

Interest Rate (Default 7.5%): Average bank FD rate. Small Finance Banks offer up to 9%.
Compounding: Quarterly compounding assumed (most bank FDs).
Tax: FD interest is fully taxable. TDS deducted if interest > ₹40K (₹50K for seniors).
Premature Withdrawal: Not modeled. Banks charge 0.5-1% penalty on early withdrawal.
5-Year Tax-Saving FD: Qualifies for Section 80C, but interest remains taxable.

Data verified: January 2026

🧮 How This Calculator Works

Inputs:

Deposit Amount (P): Principal invested
Interest Rate (r): Annual rate
Tenure (n): Number of years

Formula (Quarterly Compounding):

A = P × (1 + r/4)⁴ⁿ

Interpretation:

Maturity Amount: Total received at the end of tenure.
Principal Invested: Your initial deposit (P).
Interest Earned: Maturity - Principal = compounded growth.

Quarterly compounding = interest calculated 4 times per year and added to principal.