FD Summary
| Principal Amount | ₹25,00,000 |
| Interest Rate | 7.0% p.a. |
| Tenure | 5 years |
| Compounding | Quarterly |
| Interest Earned | ₹10,36,945 |
| Maturity Amount | ₹35,36,945 |
Tax Note: The ₹10,36,945 interest earned is fully taxable at your income slab rate. In the 30% bracket, your after-tax interest is approximately ₹6,96,827.
Impact of Compounding Frequency
Same principal, same rate — different compounding gives different returns:
| Compounding | Principal | Interest Rate | Interest Earned | Maturity Amount |
|---|---|---|---|---|
| Monthly | ₹25,00,000 | 7.0% | ₹10,44,063 | ₹35,44,063 |
| Quarterly | ₹25,00,000 | 7.0% | ₹10,36,945 | ₹35,36,945 |
| Half-Yearly | ₹25,00,000 | 7.0% | ₹10,26,497 | ₹35,26,497 |
| Annually | ₹25,00,000 | 7.0% | ₹10,06,379 | ₹35,06,379 |
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% | ₹9,51,049 | ₹34,51,049 |
| 7.0% | ₹10,36,945 | ₹35,36,945 |
| 7.25% | ₹10,80,651 | ₹35,80,651 |
| 7.5% | ₹11,24,870 | ₹36,24,870 |
| 8.0% | ₹12,14,868 | ₹37,14,868 |
Calculate Your FD Returns
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Use FD CalculatorFrequently Asked Questions
What is the maturity amount for ₹25 Lakh FD for 5 years?
At 7.0% interest with quarterly compounding, ₹25 Lakh FD matures to ₹35,36,945 in 5 years. You earn ₹10,36,945 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 ₹25 Lakh at 7.0% for 5 years: monthly compounding gives ₹35,44,063, quarterly gives ₹35,36,945, and annual gives ₹35,06,379.
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 ₹35,36,945 in 5 years. SIP in equity mutual funds could potentially grow ₹25 Lakh lumpsum to ₹44,05,854 at 12% — but with market risk. FD suits short-term goals or emergency funds. SIP suits 5+ year wealth creation goals.