1. What is the Fixed Deposit Calculation?

The Fixed Deposit calculation estimates the maturity amount for a fixed deposit investment with quarterly compounding interest. This formula is commonly used by Union Bank of India and SBI for their fixed deposit products.

2. How Does the Calculator Work?

The calculator uses the 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 compound interest with quarterly compounding, which is the standard compounding frequency for most bank fixed deposits.

3. Importance of FD Calculation

Details: Accurate FD calculation helps investors plan their investments, compare different FD schemes, and understand the potential returns from their fixed deposit investments.

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 quarterly compounding?
A: Quarterly compounding means interest is calculated and added to the principal four times a year, which helps your investment grow faster than annual compounding.

Q2: Are there any taxes on FD returns?
A: Yes, interest earned on fixed deposits is taxable as per your income tax slab. TDS may be deducted if interest exceeds certain limits.

Q3: What is the minimum investment for Union Bank/SBI FD?
A: Typically, the minimum investment for fixed deposits in these banks starts from ₹1,000, but it's best to check current bank policies.

Q4: Can I withdraw my FD before maturity?
A: Yes, but premature withdrawal may attract penalties and you may get a lower interest rate than the contracted rate.

Q5: How does this compare to other investment options?
A: FDs offer guaranteed returns and capital protection but generally provide lower returns compared to market-linked investments like mutual funds over the long term.