1. What is Fixed Deposit Interest Calculation?

Fixed Deposit (FD) interest calculation determines the maturity amount of a fixed deposit investment in India using compound interest. It helps investors understand how much their investment will grow over time.

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 grows with compound interest, where interest is added to the principal at regular intervals.

3. Importance of FD Interest Calculation

Details: Accurate FD calculation helps investors compare different investment options, plan their finances, and maximize returns from fixed deposits in Indian banks.

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 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.

Q2: How often do Indian banks compound FD interest?
A: Most Indian banks offer quarterly compounding, but some offer monthly, half-yearly, or annual compounding options.

Q3: Are FD returns taxable in India?
A: Yes, FD interest is taxable under Income Tax Act, 1961. TDS is deducted if interest exceeds ₹40,000 (₹50,000 for senior citizens) per financial year.

Q4: What is the minimum investment period for FDs?
A: Minimum period varies by bank but typically ranges from 7 days to 10 years for regular fixed deposits.

Q5: Can I withdraw my FD before maturity?
A: Yes, but premature withdrawal usually attracts penalty charges and may result in lower interest rates.