How does the FD Calculator work?
A Fixed Deposit (FD) is one of the safest financial instruments in India. Banks typically calculate interest on FDs with quarterly compounding. This calculator uses the compound interest formula with a quarterly compounding frequency to give you an accurate estimate of your maturity amount.
Intelligence Insight: While FDs offer guaranteed returns and capital protection, the interest earned is fully taxable as per your income tax slab. Ensure you factor in the post-tax return when comparing it against inflation.
The Formula
A = P(1 + r/n)^(n*t)
- A: Maturity Amount
- P: Principal investment amount
- r: Annual interest rate (in decimal, e.g., 7% = 0.07)
- n: Number of times interest is compounded per year (4 for quarterly)
- t: Time period in years