1. What is Fixed Deposit Interest?

Fixed Deposit Interest is the return earned on the principal amount invested in a fixed deposit account with HDFC Bank. The interest is calculated based on the deposit amount, tenure, and applicable interest rate.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( PV \) — Principal amount invested (Present Value)
• \( FV \) — Maturity amount (Future Value)

Explanation: The difference between the maturity amount and principal amount gives the total interest earned during the deposit period.

3. Importance of Interest Calculation

Details: Calculating fixed deposit interest helps investors understand their returns, compare different investment options, and plan their finances effectively.

4. Using the Calculator

Tips: Enter the principal amount and maturity amount in dollars. Both values must be positive numbers, and maturity amount should be greater than or equal to principal amount.

5. Frequently Asked Questions (FAQ)

Q1: What factors affect FD interest rates?
A: Interest rates depend on deposit tenure, amount, and the bank's current rate policy. Senior citizens often get higher rates.

Q2: Is FD interest taxable?
A: Yes, interest earned is taxable as per your income tax slab unless invested in tax-saving FDs with 5-year lock-in.

Q3: Can I withdraw FD before maturity?
A: Yes, but premature withdrawals usually attract penalty charges and lower interest rates.

Q4: What's the difference between simple and compound interest?
A: Simple interest is calculated only on principal, while compound interest is calculated on principal plus accumulated interest.

Q5: How often is interest paid out?
A: You can choose monthly, quarterly, half-yearly, yearly payout, or reinvestment (cumulative option) at the time of FD creation.