FD Summary
| Principal Amount | ₹1,00,000 |
| Interest Rate | 7.25% p.a. |
| Tenure | 5 years |
| Compounding | Quarterly |
| Interest Earned | ₹43,226 |
| Maturity Amount | ₹1,43,226 |
Tax Note: The ₹43,226 interest earned is fully taxable at your income slab rate. In the 30% bracket, your after-tax interest is approximately ₹29,048.
Impact of Compounding Frequency
Same principal, same rate — different compounding gives different returns:
| Compounding | Principal | Interest Rate | Interest Earned | Maturity Amount |
|---|---|---|---|---|
| Monthly | ₹1,00,000 | 7.25% | ₹43,535 | ₹1,43,535 |
| Quarterly | ₹1,00,000 | 7.25% | ₹43,226 | ₹1,43,226 |
| Half-Yearly | ₹1,00,000 | 7.25% | ₹42,773 | ₹1,42,773 |
| Annually | ₹1,00,000 | 7.25% | ₹41,901 | ₹1,41,901 |
Returns at Different Interest Rates
How much does a 0.5% rate difference matter? More than you think:
| Interest Rate | Interest Earned | Maturity Amount |
|---|---|---|
| 6.5% | ₹38,042 | ₹1,38,042 |
| 7.0% | ₹41,478 | ₹1,41,478 |
| 7.25% | ₹43,226 | ₹1,43,226 |
| 7.5% | ₹44,995 | ₹1,44,995 |
| 8.0% | ₹48,595 | ₹1,48,595 |
Calculate Your FD Returns
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Use FD CalculatorFrequently Asked Questions
What is the maturity amount for ₹1 Lakh FD for 5 years?
At 7.25% interest with quarterly compounding, ₹1 Lakh FD matures to ₹1,43,226 in 5 years. You earn ₹43,226 as interest income.
Is FD interest taxable in India?
Yes. FD interest is added to your income and taxed at your slab rate. Banks deduct TDS at 10% if interest exceeds ₹40,000 per year (₹50,000 for senior citizens). You can submit Form 15G/15H to avoid TDS if your income is below taxable limit.
Which compounding frequency gives the best FD returns?
Monthly compounding gives the highest effective yield. For ₹1 Lakh at 7.25% for 5 years: monthly compounding gives ₹1,43,535, quarterly gives ₹1,43,226, and annual gives ₹1,41,901.
Should I break my FD if interest rates rise?
Breaking an FD early typically incurs a 0.5–1% penalty. Do the math: if new rates are 1%+ higher, breaking and reinvesting often makes sense for longer tenures. For FDs with less than 6 months remaining, it's usually not worth it.
FD vs SIP — which is better for this amount?
FD gives guaranteed returns of ₹1,43,226 in 5 years. SIP in equity mutual funds could potentially grow ₹1 Lakh lumpsum to ₹1,76,234 at 12% — but with market risk. FD suits short-term goals or emergency funds. SIP suits 5+ year wealth creation goals.