1. What is Fixed Deposit Calculation?

Fixed Deposit calculation determines the maturity amount of an Indian fixed deposit investment using the compound interest formula. It helps investors understand their returns before investing.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

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 based on the principal amount, interest rate, compounding frequency, and time period.

3. Importance of FD Calculation

Details: Accurate FD calculation helps investors compare different investment options, plan their finances, and make informed investment decisions for better returns.

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.

5. Frequently Asked Questions (FAQ)

Q1: What is the minimum investment for Indian FDs?
A: Minimum investment varies by bank but typically starts from ₹1,000 to ₹10,000 for regular fixed deposits.

Q2: Are FD returns taxable in India?
A: Yes, interest earned on fixed deposits is taxable under Income Tax Act, 1961. TDS is deducted if interest exceeds ₹40,000 (₹50,000 for senior citizens).

Q3: What happens if I break my FD prematurely?
A: Premature withdrawal usually attracts penalty of 0.5-1% on the interest rate, and you may get lower interest than contracted.

Q4: Which compounding frequency gives highest returns?
A: More frequent compounding (monthly or quarterly) generally gives slightly higher returns than annual compounding for the same nominal rate.

Q5: Are senior citizen FDs different?
A: Yes, most banks offer 0.25-0.50% higher interest rates for senior citizens (typically 60+ years) on fixed deposits.