Bank Of India FD Interest Rate Calculator

Compound Interest Formula:

\[ A = P \times (1 + r/n)^{n \times t} \]

Principal Amount (P):

₹

Annual Interest Rate (r):

Compounding Frequency (n):

Time Period (t):

years

Maturity Amount (A):

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1. What is the Compound Interest Formula?

The compound interest formula calculates the maturity amount for a fixed deposit where interest is earned on both the principal amount and accumulated interest over time. This allows your investment to grow at an accelerated rate compared to simple interest.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ A = P \times (1 + r/n)^{n \times t} \]

Where:

\( A \) — Maturity amount (₹)
\( P \) — Principal amount (₹)
\( r \) — Annual interest rate (decimal)
\( n \) — Compounding frequency per year
\( t \) — Time period in years

Explanation: The formula accounts for how often interest is compounded, which significantly impacts the final maturity amount.

3. Importance of FD Interest Calculation

Details: Accurate interest calculation helps investors plan their finances, compare different investment options, and understand the true growth potential of their fixed deposits with Bank of India.

4. Using the Calculator

Tips: Enter principal amount in ₹, annual interest rate in percentage, select compounding frequency, and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between simple and compound interest?
A: Simple interest is calculated only on the principal amount, while compound interest is calculated on both principal and accumulated interest, leading to faster growth.

Q2: How does compounding frequency affect returns?
A: More frequent compounding (monthly vs annually) results in higher returns because interest is calculated and added to the principal more often.

Q3: Are there any taxes on FD interest?
A: Yes, interest earned on fixed deposits is taxable as per your income tax slab. TDS may be deducted if interest exceeds specified limits.

Q4: What are the current Bank of India FD interest rates?
A: Interest rates vary based on tenure and deposit amount. Please check Bank of India's official website for current rates.

Q5: Can I withdraw my FD before maturity?
A: Premature withdrawal is usually allowed but may attract penalty charges and revised interest rates as per bank policies.