1. What is Federal Bank Fixed Deposit?

Federal Bank Fixed Deposit is a savings instrument where you deposit a lump sum amount for a fixed period at a predetermined interest rate, compounded quarterly. It offers higher returns than regular savings accounts with guaranteed returns.

2. How Does the Calculator Work?

The calculator uses the Federal Bank FD formula:

Where:

• \( A \) — Maturity amount (currency units)
• \( P \) — Principal amount (currency units)
• \( R \) — Annual interest rate (%)
• \( T \) — Time period (years)

Explanation: The formula calculates quarterly compounded interest, where the annual rate is divided by 4 and compounded 4 times per year over the investment period.

3. Importance of Fixed Deposit Calculation

Details: Accurate FD calculation helps in financial planning, comparing investment options, and understanding the power of compound interest for wealth creation.

4. Using the Calculator

Tips: Enter principal amount in currency units, annual interest rate in percentage, and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the minimum deposit amount for Federal Bank FD?
A: The minimum deposit amount varies by bank policy, but typically starts from a few thousand currency units.

Q2: Are FD returns taxable?
A: Yes, interest earned on fixed deposits is taxable as per your income tax slab rates.

Q3: Can I withdraw my FD before maturity?
A: Yes, but premature withdrawal may attract penalties and lower interest rates as per bank terms.

Q4: How often is interest compounded in Federal Bank FDs?
A: Federal Bank typically compounds interest quarterly, as shown in the formula.

Q5: Are senior citizens eligible for higher interest rates?
A: Yes, most banks including Federal Bank offer additional interest rates for senior citizens on fixed deposits.