FD Summary
| Principal Amount | ₹5,00,000 |
| Interest Rate | 7.0% p.a. |
| Tenure | 10 years |
| Compounding | Quarterly |
| Interest Earned | ₹5,00,799 |
| Maturity Amount | ₹10,00,799 |
Tax Note: The ₹5,00,799 interest earned is fully taxable at your income slab rate. In the 30% bracket, your after-tax interest is approximately ₹3,36,537.
Impact of Compounding Frequency
Same principal, same rate — different compounding gives different returns:
| Compounding | Principal | Interest Rate | Interest Earned | Maturity Amount |
|---|---|---|---|---|
| Monthly | ₹5,00,000 | 7.0% | ₹5,04,831 | ₹10,04,831 |
| Quarterly | ₹5,00,000 | 7.0% | ₹5,00,799 | ₹10,00,799 |
| Half-Yearly | ₹5,00,000 | 7.0% | ₹4,94,894 | ₹9,94,894 |
| Annually | ₹5,00,000 | 7.0% | ₹4,83,576 | ₹9,83,576 |
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% | ₹4,52,779 | ₹9,52,779 |
| 7.0% | ₹5,00,799 | ₹10,00,799 |
| 7.25% | ₹5,25,685 | ₹10,25,685 |
| 7.5% | ₹5,51,175 | ₹10,51,175 |
| 8.0% | ₹6,04,020 | ₹11,04,020 |
Calculate Your FD Returns
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Use FD CalculatorFrequently Asked Questions
What is the maturity amount for ₹₹5 Lakh FD for 10 years?
At 7.0% interest with quarterly compounding, ₹₹5 Lakh FD matures to ₹10,00,799 in 10 years. You earn ₹5,00,799 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 ₹₹5 Lakh at 7.0% for 10 years: monthly compounding gives ₹10,04,831, quarterly gives ₹10,00,799, and annual gives ₹9,83,576.
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 ₹10,00,799 in 10 years. SIP in equity mutual funds could potentially grow ₹₹5 Lakh lumpsum to ₹15,52,924 at 12% — but with market risk. FD suits short-term goals or emergency funds. SIP suits 5+ year wealth creation goals.