About FD Calculator
A Fixed Deposit (FD) calculator helps you estimate the maturity amount of your FD investment. It calculates the interest earned based on the principal amount, interest rate, tenure, and compounding frequency.
Formula Used
A = P × (1 + r/n)^(n×t)
Where A = Maturity Amount, P = Principal, r = Annual Interest Rate, n = Compounding Frequency, t = Time in Years
Tips & Best Practices
- Senior citizens get 0.25% to 0.50% extra interest
- Tax-saving FDs have a 5-year lock-in but offer tax benefits under 80C
- Quarterly compounding gives slightly higher returns than yearly
- FD interest is taxable - consider Tax Deducted at Source (TDS)
- Compare FD rates across banks - private banks often offer higher rates
Frequently Asked Questions
What is a Fixed Deposit?
A Fixed Deposit is a financial instrument where you deposit a lump sum for a fixed tenure at a predetermined interest rate, providing guaranteed returns.
Which is better - FD or RD?
FD is better if you have a lump sum to invest, while RD is suitable for those who want to save regularly every month. FD typically earns slightly higher interest.
Is FD interest taxable?
Yes, FD interest is taxable as per your income tax slab. TDS is deducted if interest exceeds Rs. 40,000 per year (Rs. 50,000 for senior citizens).
Can I break my FD before maturity?
Yes, but premature withdrawal usually attracts a penalty of 0.5% to 1% reduction in interest rate.