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FD Interest Formula (Quarterly Compounding):
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The Fixed Deposit (FD) interest calculation uses compound interest formula with quarterly compounding, which is the standard method used by Indian banks including SBI for calculating FD returns. This provides an accurate estimate of your maturity amount.
The calculator uses the quarterly compounding formula:
Where:
Explanation: The formula calculates the compound interest with quarterly compounding, which means interest is calculated and added to the principal four times per year.
Details: Fixed Deposits are one of the most popular investment options in India due to their safety, guaranteed returns, and flexibility. Understanding the exact maturity amount helps in financial planning and investment decision making.
Tips: Enter the principal amount in rupees, annual interest rate in percentage, and time period in years. All values must be positive numbers. The calculator will show both the maturity amount and the interest earned.
Q1: What is the minimum investment for SBI FD?
A: The minimum investment for SBI Fixed Deposit is typically ₹1,000 for regular citizens and ₹1,000 for senior citizens.
Q2: Are FD interest rates fixed for entire tenure?
A: Yes, once you book an FD at a particular interest rate, it remains fixed for the entire tenure regardless of market fluctuations.
Q3: What is TDS on FD interest?
A: Banks deduct TDS (Tax Deducted at Source) at 10% on interest income if it exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).
Q4: Can I withdraw FD before maturity?
A: Yes, but premature withdrawal may attract penalty charges and the interest rate may be reduced as per bank's terms and conditions.
Q5: Are FDs safe investment options?
A: Yes, bank FDs are considered very safe as they are insured up to ₹5 lakh per depositor per bank under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme.