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 compounded periodically. For HDFC Bank FDs, interest is typically compounded quarterly.

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 interest earned on both the principal and accumulated interest over time.

3. Importance of FD Calculation

Details: Accurate FD calculations help investors understand potential returns, compare investment options, and plan their finances effectively.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate (check current HDFC FD rates), and investment period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are current HDFC FD rates?
A: Rates vary by tenure (7 days to 10 years) and customer type (general/senior citizen). Check HDFC's website for current rates.

Q2: How often is interest compounded?
A: HDFC typically compounds interest quarterly, but this calculator assumes monthly compounding for more precise results.

Q3: Are there tax implications?
A: Yes, FD interest is taxable as per your income tax slab. TDS is deducted if interest exceeds ₹40,000 (₹50,000 for senior citizens).

Q4: What's the minimum investment for HDFC FD?
A: Minimum ₹5,000 for regular FDs, though amounts may vary for special schemes.

Q5: Can I withdraw my FD early?
A: Yes, but premature withdrawals may attract penalty (typically 0.5-1% less than applicable rate).