Calculate the maturity amount and interest earned on a fixed or term deposit in any currency.
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum with a bank for a fixed tenure at a guaranteed interest rate. The maturity value depends on whether interest is compounded or paid out periodically.
For compounding FDs, the formula is A = P × (1 + r/n)nt, where P is the principal, r is the annual rate, n is the compounding frequency (quarterly is most common for bank FDs), and t is the tenure in years. For a ₹1,00,000 FD at 7% for 3 years compounded quarterly: A = ₹1,00,000 × (1 + 0.07/4)12 ≈ ₹1,23,144. The total interest earned is ₹23,144.
FDs are low-risk instruments guaranteed by deposit insurance (up to ₹5 lakh in India per bank). The trade-off is lower returns compared to equity. They are ideal for capital preservation, emergency funds, or short-to-medium term goals where capital safety is paramount.
A Fixed Deposit (FD) is a savings instrument offered by banks where you deposit a fixed sum for a predetermined period at a guaranteed interest rate. The bank pays you interest, and you receive the full principal plus interest at maturity.
Most bank FDs compound interest quarterly. The formula is A = P × (1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency, and t is years. Some FDs offer simple interest paid monthly or quarterly instead of compounding.
FDs are safer with guaranteed returns but lower potential gains (typically 6–8%). SIPs in equity mutual funds carry market risk but have historically returned 10–14% over the long term. FDs suit short-term goals or risk-averse investors; SIPs suit long-term wealth creation.
Most banks allow premature withdrawal but charge a penalty of 0.5–1% reduction in the interest rate, and you receive interest only for the period the money was deposited. Some tax-saving FDs have a mandatory 5-year lock-in period.