1. What is the Compound Interest Formula?

The compound interest formula calculates the growth of a fixed deposit where interest is earned on both the principal amount and the accumulated interest from previous periods. This is how HDFC Bank and Axis Bank calculate returns on their fixed deposits.

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 monthly compounding, which is typical for bank fixed deposits in India.

3. Importance of FD Calculation

Details: Accurate FD calculations help investors compare returns across different banks (like HDFC and Axis Bank), plan their investments, and understand how compounding affects their returns 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: How does HDFC Bank's FD compare to Axis Bank?
A: Both banks offer competitive rates. This calculator helps you compare the exact returns based on current interest rates.

Q2: Is the interest compounded monthly?
A: Yes, most bank FDs in India compound interest monthly, though payout frequency may vary.

Q3: Are TDS charges included in this calculation?
A: No, this calculator shows gross returns before TDS deductions.

Q4: What's the minimum investment for HDFC/Axis Bank FDs?
A: Typically ₹5,000 for regular FDs, though amounts may vary by bank and FD type.

Q5: How accurate is this calculator?
A: It provides theoretical returns based on the inputs. Actual returns may vary slightly due to rounding in bank calculations.