Fixed Deposit (FD) Calculator

What is a Fixed Deposit (FD)?

A Fixed Deposit (FD), also known as a Term Deposit, is one of the safest and most popular investment instruments offered by banks and Non-Banking Financial Companies (NBFCs) in India. It allows you to deposit a lump sum amount for a fixed tenure at a predetermined interest rate, offering guaranteed returns irrespective of market fluctuations.

How does the Anivicus FD Calculator Work?

Unlike simple interest calculators, the Anivicus FD Calculator uses the Quarterly Compounding Formula. In India, most banks compound FD interest every quarter (every 3 months). This means you earn "interest on your interest" four times a year, resulting in a higher maturity value than standard annual compounding.

• The Formula Used: $A = P \times (1 + r/n)^{n \times t}$
• Where P is the Principal amount, r is the annual interest rate, n is the number of times interest is compounded per year (4 for quarterly), and t is the tenure in years.

Key Benefits of Investing in FDs

• Guaranteed Returns: Your principal and interest are completely shielded from stock market volatility.
• DICGC Insurance: Deposits in registered Indian banks are insured up to ₹5 Lakhs by the Deposit Insurance and Credit Guarantee Corporation (DICGC), ensuring ultimate safety for your funds.
• Senior Citizen Benefits: Almost all banks offer an additional 0.50% to 0.75% interest rate to senior citizens (individuals aged 60 and above).
• Loan Against FD: In times of emergency, you can easily take a loan or overdraft up to 90% of your FD amount without breaking the deposit.

Tax-Saving Fixed Deposits

If you are looking to save income tax, you can opt for a Tax-Saver FD. Under Section 80C of the Income Tax Act, investments up to ₹1.5 Lakhs in a Tax-Saver FD are eligible for tax deduction. However, these FDs come with a strict mandatory lock-in period of 5 years, and premature withdrawal is not allowed.

Note: While the principal amount in a Tax-Saver FD is exempt, the interest earned on any FD is fully taxable as per your income tax slab, unless you submit form 15G/15H.