FD RETURNS EXPLAINED: HOW TO CALCULATE CI FOR HIGHER MATURITY AMOUNTS

A fixed deposit (FD) continues to be a trusted choice for those who value steady and predictable growth over market-driven uncertainty.

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A Compound Interest Calculator helps show how even a modest deposit can grow meaningfully when interest is compounded over time.What truly makes an FD rewarding is the power of compounding, the process where earned interest begins generating its own returns. Factors such as tenure, rate of interest, and compounding frequency together determine how much the final maturity amount grows.

The Basics of Fixed Deposit Returns

An FD allows you to deposit a lump sum for a chosen tenure at a fixed interest rate. The bank or financial institution credits interest periodically: monthly, quarterly, or annually, based on the compounding frequency. Over time, interest gets added to the principal, and future interest is calculated on this growing balance.

For instance, if someone deposits Rs 5 lakh at a 7% annual rate for 5 years, compounding quarterly, the maturity amount will exceed what it would be under simple interest. Compounding acts like a multiplier, making your money grow faster without any additional deposits.