🔒 Tax Saver FD: 5-year mandatory lock-in. Section 80C deduction up to ₹1,50,000. Premature withdrawal not permitted. Interest is taxable — TDS applies as per your bracket.
ⓘ TDS threshold: ₹40,000/yr (₹50,000 for senior citizens). Submit Form 15G/15H if income below taxable limit.
■ Principal■ Interest
FD Growth Over Tenure
FD vs SIP — Head to Head
📊 Year-wise Breakdown
💡 Smart FD Tips
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Laddering beats single FD — Instead of one large FD, split into multiple FDs with different tenures (1yr, 2yr, 3yr). You get liquidity at each maturity without breaking the full deposit.
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Submit Form 15G/15H — If your total income is below the taxable limit, submit Form 15G (below 60) or 15H (senior citizens) to your bank at the start of every financial year. Prevents TDS deduction entirely.
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Senior citizen rate advantage — If you are 60+, always explicitly ask for the senior citizen rate. Most banks offer 0.25–0.50% extra. On ₹10L for 5 years, 0.5% extra earns approximately ₹28,000 more.
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Quarterly beats yearly compounding — For the same rate, quarterly compounding gives a higher effective yield than yearly. Most Indian banks compound quarterly by default — always verify before booking.
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FD + SIP combo — Use FD for your emergency fund and short-term goals (guaranteed returns, capital safety). Use SIP for long-term wealth creation (higher returns, market risk). Both together form a solid financial base.
Frequently Asked Questions
How is FD interest calculated?
For cumulative FD: Maturity = P × (1 + r/n)^(n×t), where P is principal, r is annual rate, n is compounding frequency per year, and t is tenure in years. Quarterly compounding (n=4) is the RBI standard for most Indian banks.
When is TDS deducted on FD interest?
TDS at 10% is deducted when FD interest in a financial year exceeds ₹40,000 (₹50,000 for senior citizens). If PAN is not provided, TDS is deducted at 20%. Submit Form 15G (below 60) or Form 15H (senior citizens) to avoid TDS if your income is below the taxable limit.
What extra interest do senior citizens get?
Most Indian banks offer 0.25% to 0.50% additional interest to senior citizens (age 60+). TekproAI uses +0.50% as the default benefit. Always confirm with your specific bank as rates vary.
What is a Tax Saver FD?
Tax Saver FD has a mandatory 5-year lock-in and qualifies for Section 80C deduction up to ₹1,50,000 per year — saving up to ₹46,800 in tax at 30% bracket. However, interest earned is fully taxable and TDS applies. Premature withdrawal is not allowed.
FD or SIP — which is better?
FD gives guaranteed returns (typically 6.5–7.5%) with capital safety and TDS already accounted for. SIP in equity mutual funds historically gives higher returns (10–12%) but with market risk and no guarantee. FD suits short-term goals and risk-averse investors; SIP suits long-term wealth creation.
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For educational use only. FD rates shown are illustrative. Actual rates vary by bank, tenure and investor type. TDS rules are as per current Indian tax law and may change. TekproAI is not a SEBI-registered investment advisor.
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