Fixed Deposit Calculator with Quarterly Compounding – Calculate FD Returns
The Fixed Deposit Calculator with Quarterly Compounding is a helpful tool for estimating your FD returns with interest compounded every three months. Quarterly compounding results in better returns compared to yearly or half-yearly compounding because your interest is reinvested and added to the principal more frequently.
What is Quarterly Compounding?
Quarterly compounding refers to the process where the interest earned on a fixed deposit is added to the principal every three months. This allows your interest to earn interest, increasing the overall return on your investment.
How the FD Calculator with Quarterly Compounding Works
To use the calculator, provide the following information:
- Deposit Amount – The initial amount you wish to invest
- Annual Interest Rate – The interest rate offered by the bank
- Tenure – The duration of the fixed deposit (in years)
The calculator will show:
- Total Maturity Amount (Principal + Interest)
- Total Interest Earned over the entire tenure
Formula Used for Quarterly Compounding
Maturity Value = P × (1 + r/400)4n
Where:
- P = Principal amount
- r = Annual interest rate (%)
- n = Number of years
Example Calculation
If you invest ₹1,00,000 at 7% annual interest for 2 years with quarterly compounding:
- Maturity Amount: ₹1,14,700
- Total Interest Earned: ₹14,700
Benefits of Quarterly Compounding FDs
- Higher returns compared to yearly or half-yearly compounding
- Frequent compounding helps maximize interest accumulation
- Perfect for medium to long-term savings
Taxation on FD Interest
The interest earned on fixed deposits is taxable according to your income tax slab. If your total interest in a financial year exceeds ₹40,000 (₹50,000 for senior citizens), TDS will be deducted. You can submit Form 15G/15H if you wish to avoid TDS, subject to eligibility.
Conclusion
The Fixed Deposit Calculator with Quarterly Compounding is an easy-to-use tool to estimate the returns on your investment. With quarterly compounding, you can benefit from more frequent interest reinvestment, leading to higher returns over time. Use this calculator to make smarter financial decisions and plan for your future with fixed deposits.