1. What is the Compound Interest Formula?

The compound interest formula calculates the amount of interest earned on a fixed deposit where the interest is added to the principal at regular intervals, resulting in interest being earned on interest.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Principal amount (initial investment)
• \( R \) — Monthly interest rate (annual rate divided by 12)
• \( N \) — Number of compounding periods (months)
• \( A \) — Final amount including interest

Explanation: The formula accounts for exponential growth of your investment through compounding at regular intervals.

3. Importance of FD Calculation

Details: Calculating FD returns helps in financial planning, comparing investment options, and understanding how compounding can significantly increase your returns over time.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate in percentage, tenure in years, and select compounding frequency. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are HDFC's current FD interest rates?
A: Rates vary (typically 3-7% p.a.) based on tenure and customer type. Check HDFC's official website for current rates.

Q2: How does compounding frequency affect returns?
A: More frequent compounding (monthly vs annually) yields higher returns due to the compounding effect.

Q3: Are FD interest rates fixed?
A: Yes, the rate is fixed at the time of FD booking for the entire tenure.

Q4: What is the minimum deposit for HDFC FDs?
A: Typically ₹5,000 for regular FDs, but may vary for special schemes.

Q5: Are premature withdrawals allowed?
A: Yes, but with penalty charges (usually 0.5-1% lower interest rate).