📐 Formula Used
A = P × (1 + r/4)^(4×t) (Quarterly compounding per RBI guidelines) CI = A – P
Frequently Asked Questions
How does FD work?
An FD is a term deposit where you invest a lump sum for a fixed period at a guaranteed interest rate. Most banks compound interest quarterly.
What is the highest FD interest rate?
FD rates vary by bank and tenure. Small Finance Banks often offer 8–9% p.a., while major banks offer 6.5–7.5% p.a. (subject to change).
Is FD interest taxable?
Yes. FD interest is taxable as 'Income from Other Sources' at your slab rate. Banks deduct TDS at 10% if interest exceeds ₹40,000/year (₹50,000 for seniors).
What is cumulative vs non-cumulative FD?
Cumulative FD reinvests interest (compound effect). Non-cumulative FD pays out interest periodically (monthly, quarterly, or annually).