1. What is Fixed Deposit Maturity Calculation?

The fixed deposit maturity calculation determines how much your investment will grow over time based on the principal amount, interest rate, compounding frequency, and time period.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Principal amount (initial investment)
• \( r \) — Annual interest rate (in decimal)
• \( n \) — Number of times interest is compounded per year
• \( t \) — Time the money is invested for (in years)

Explanation: The formula accounts for the effect of compounding, where interest is earned on both the initial principal and the accumulated interest from previous periods.

3. Importance of Maturity Calculation

Details: Calculating the maturity amount helps investors plan their finances, compare different FD schemes, and make informed investment decisions.

4. Using the Calculator

Tips: Enter principal in INR, annual interest rate in percentage, compounding frequency (e.g., 4 for quarterly), and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and compound interest?
A: Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus accumulated interest.

Q2: How does compounding frequency affect returns?
A: More frequent compounding (e.g., monthly vs. annually) results in higher returns due to the "interest on interest" effect.

Q3: What are typical compounding frequencies?
A: Common options are annually (1), semi-annually (2), quarterly (4), monthly (12), or daily (365).

Q4: Are FD returns taxable?
A: Yes, interest earned on FDs is taxable as per your income tax slab, except for tax-saving FDs which have a lock-in period.

Q5: Can I withdraw my FD before maturity?
A: Yes, but premature withdrawals usually attract penalties and may receive lower interest rates.