FD Compound Interest Calculator HDFC

Compound Interest Formula:

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

Principal Amount (P):

INR

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 fixed deposits where interest is compounded at regular intervals. It shows how your investment grows over time with the power of compounding.

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 (INR)
\( P \) — Principal amount (INR)
\( R \) — Annual interest rate (decimal)
\( n \) — Compounding frequency per year
\( T \) — Time period in years

Explanation: The formula calculates how much your investment will grow when interest is compounded at regular intervals, earning interest on both principal and accumulated interest.

3. Importance of Compound Interest Calculation

Details: Understanding compound interest helps investors make informed decisions about fixed deposits, plan for financial goals, and maximize returns on investments through the power of compounding.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate as 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 due to interest being calculated and added more frequently.

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 ₹40,000 (₹50,000 for senior citizens).

Q4: What are the typical FD interest rates at HDFC?
A: HDFC offers varying interest rates based on tenure, typically ranging from 3% to 7.5% for general public, with higher rates for senior citizens.

Q5: Can I withdraw my FD before maturity?
A: Yes, but premature withdrawal may attract penalty charges and the interest rate may be revised to the rate applicable for the period the deposit was held.