1. What is Compound Interest?

Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. For fixed deposits, interest is typically compounded quarterly or monthly.

2. How Does FD Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( A \) — Maturity amount (INR)
• \( P \) — Principal amount (INR)
• \( R \) — Monthly interest rate (annual rate / 12, as decimal)
• \( N \) — Number of compounding periods (months)

Explanation: The formula accounts for monthly compounding, where interest earned each month is added to the principal for the next month's interest calculation.

3. Importance of FD Calculation

Details: Accurate FD calculations help investors plan their finances, compare different investment options, and understand the power of compounding over time.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is HDFC Bank's current FD interest rate?
A: Rates vary (typically 3-7.25% for general public, higher for seniors). Check HDFC's official website for current rates.

Q2: Is FD interest taxable?
A: Yes, interest is taxable as per your income tax slab. TDS is deducted if interest exceeds ₹40,000 (₹50,000 for seniors).

Q3: What's the difference between simple and compound interest?
A: Simple interest is calculated only on principal, while compound interest is calculated on principal + accumulated interest.

Q4: Can I withdraw FD before maturity?
A: Yes, but premature withdrawals may attract penalty (typically 0.5-1% reduction in interest rate).

Q5: Are HDFC FDs safe?
A: HDFC Bank FDs are considered safe as they are covered under DICGC insurance up to ₹5 lakh per depositor.