FD Summary
| Principal Amount | ₹3,00,000 |
| Interest Rate | 7.25% p.a. |
| Tenure | 3 years |
| Compounding | Quarterly |
| Interest Earned | ₹72,164 |
| Maturity Amount | ₹3,72,164 |
Tax Note: The ₹72,164 interest earned is fully taxable at your income slab rate. In the 30% bracket, your after-tax interest is approximately ₹48,494.
Impact of Compounding Frequency
Same principal, same rate — different compounding gives different returns:
| Compounding | Principal | Interest Rate | Interest Earned | Maturity Amount |
|---|---|---|---|---|
| Monthly | ₹3,00,000 | 7.25% | ₹72,646 | ₹3,72,646 |
| Quarterly | ₹3,00,000 | 7.25% | ₹72,164 | ₹3,72,164 |
| Half-Yearly | ₹3,00,000 | 7.25% | ₹71,457 | ₹3,71,457 |
| Annually | ₹3,00,000 | 7.25% | ₹70,095 | ₹3,70,095 |
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% | ₹64,022 | ₹3,64,022 |
| 7.0% | ₹69,432 | ₹3,69,432 |
| 7.25% | ₹72,164 | ₹3,72,164 |
| 7.5% | ₹74,915 | ₹3,74,915 |
| 8.0% | ₹80,473 | ₹3,80,473 |
Calculate Your FD Returns
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Use FD CalculatorFrequently Asked Questions
What is the maturity amount for ₹₹3 Lakh FD for 3 years?
At 7.25% interest with quarterly compounding, ₹₹3 Lakh FD matures to ₹3,72,164 in 3 years. You earn ₹72,164 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 ₹₹3 Lakh at 7.25% for 3 years: monthly compounding gives ₹3,72,646, quarterly gives ₹3,72,164, and annual gives ₹3,70,095.
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 ₹3,72,164 in 3 years. SIP in equity mutual funds could potentially grow ₹₹3 Lakh lumpsum to ₹4,21,478 at 12% — but with market risk. FD suits short-term goals or emergency funds. SIP suits 5+ year wealth creation goals.