FD Summary
| Principal Amount | ₹2,00,000 |
| Interest Rate | 7.25% p.a. |
| Tenure | 3 years |
| Compounding | Quarterly |
| Interest Earned | ₹48,109 |
| Maturity Amount | ₹2,48,109 |
Tax Note: The ₹48,109 interest earned is fully taxable at your income slab rate. In the 30% bracket, your after-tax interest is approximately ₹32,329.
Impact of Compounding Frequency
Same principal, same rate — different compounding gives different returns:
| Compounding | Principal | Interest Rate | Interest Earned | Maturity Amount |
|---|---|---|---|---|
| Monthly | ₹2,00,000 | 7.25% | ₹48,430 | ₹2,48,430 |
| Quarterly | ₹2,00,000 | 7.25% | ₹48,109 | ₹2,48,109 |
| Half-Yearly | ₹2,00,000 | 7.25% | ₹47,638 | ₹2,47,638 |
| Annually | ₹2,00,000 | 7.25% | ₹46,730 | ₹2,46,730 |
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% | ₹42,682 | ₹2,42,682 |
| 7.0% | ₹46,288 | ₹2,46,288 |
| 7.25% | ₹48,109 | ₹2,48,109 |
| 7.5% | ₹49,943 | ₹2,49,943 |
| 8.0% | ₹53,648 | ₹2,53,648 |
Calculate Your FD Returns
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Use FD CalculatorFrequently Asked Questions
What is the maturity amount for ₹2 Lakh FD for 3 years?
At 7.25% interest with quarterly compounding, ₹2 Lakh FD matures to ₹2,48,109 in 3 years. You earn ₹48,109 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 ₹2 Lakh at 7.25% for 3 years: monthly compounding gives ₹2,48,430, quarterly gives ₹2,48,109, and annual gives ₹2,46,730.
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 ₹2,48,109 in 3 years. SIP in equity mutual funds could potentially grow ₹2 Lakh lumpsum to ₹2,80,986 at 12% — but with market risk. FD suits short-term goals or emergency funds. SIP suits 5+ year wealth creation goals.