Question 1

What is a Fixed Deposit (FD)?

Accepted Answer

A Fixed Deposit is a secure financial instrument offered by banks which provides investors a higher rate of interest than a regular savings account, until the given maturity date.

Question 2

How is FD interest calculated?

Accepted Answer

FD interest is typically compounded quarterly. The formula is A = P(1 + r/n)^(n*t), where P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year (usually 4), and t is the tenure in years.

Question 3

Is FD interest taxable?

Accepted Answer

Yes, interest earned on Fixed Deposits is fully taxable according to your income tax slab. Banks will deduct TDS at 10% if the interest exceeds ₹40,000 in a year (₹50,000 for senior citizens) unless Form 15G/15H is submitted.

Fixed Deposit Calculator

Fixed Deposit Details

Frequently Asked Questions