FD Summary
| Principal Amount | ₹10,00,000 |
| Interest Rate | 7.25% p.a. |
| Tenure | 3 years |
| Compounding | Quarterly |
| Interest Earned | ₹2,40,547 |
| Maturity Amount | ₹12,40,547 |
Tax Note: The ₹2,40,547 interest earned is fully taxable at your income slab rate. In the 30% bracket, your after-tax interest is approximately ₹1,61,648.
Impact of Compounding Frequency
Same principal, same rate — different compounding gives different returns:
| Compounding | Principal | Interest Rate | Interest Earned | Maturity Amount |
|---|---|---|---|---|
| Monthly | ₹10,00,000 | 7.25% | ₹2,42,152 | ₹12,42,152 |
| Quarterly | ₹10,00,000 | 7.25% | ₹2,40,547 | ₹12,40,547 |
| Half-Yearly | ₹10,00,000 | 7.25% | ₹2,38,190 | ₹12,38,190 |
| Annually | ₹10,00,000 | 7.25% | ₹2,33,650 | ₹12,33,650 |
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% | ₹2,13,408 | ₹12,13,408 |
| 7.0% | ₹2,31,439 | ₹12,31,439 |
| 7.25% | ₹2,40,547 | ₹12,40,547 |
| 7.5% | ₹2,49,716 | ₹12,49,716 |
| 8.0% | ₹2,68,242 | ₹12,68,242 |
Calculate Your FD Returns
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Use FD CalculatorFrequently Asked Questions
What is the maturity amount for ₹₹10 Lakh FD for 3 years?
At 7.25% interest with quarterly compounding, ₹₹10 Lakh FD matures to ₹12,40,547 in 3 years. You earn ₹2,40,547 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 ₹₹10 Lakh at 7.25% for 3 years: monthly compounding gives ₹12,42,152, quarterly gives ₹12,40,547, and annual gives ₹12,33,650.
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 ₹12,40,547 in 3 years. SIP in equity mutual funds could potentially grow ₹₹10 Lakh lumpsum to ₹14,04,928 at 12% — but with market risk. FD suits short-term goals or emergency funds. SIP suits 5+ year wealth creation goals.