How Does the Fixed Deposit (FD) Calculator Work?
Fixed Deposits remain one of the safest and most popular investment choices in India, offering guaranteed returns without market volatility. Our Fixed Deposit (FD) Calculator helps you accurately determine the maturity value of your investment. Simply input your principal amount, the bank’s interest rate, and the tenure. The calculator automatically handles complex compounding frequencies—like the standard quarterly compounding used by most Indian banks—to give you precise results.
Frequently Asked Questions (FAQs)
What is quarterly compounding in FDs?
Most Indian banks calculate FD interest on a quarterly basis (every 3 months). This means the interest earned in the first quarter is added to your principal, and in the next quarter, you earn interest on this new, larger amount, maximizing your total returns.
Do I have to pay tax on FD interest?
Yes, the interest earned on Fixed Deposits is fully taxable as per your income tax slab. If your interest income exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year, the bank will deduct a 10% TDS (Tax Deducted at Source).
Can I withdraw my Fixed Deposit before maturity?
Yes, most banks allow premature withdrawal of FDs. However, doing so usually attracts a penalty, typically a 0.5% to 1% reduction in the applicable interest rate for the period the deposit was held.