Work out the maturity value and interest of a bank fixed deposit, compounded quarterly the way Indian banks do it.
Illustrative projection using the assumptions you entered. Market returns are not guaranteed; actual results will differ. This is an educational tool, not financial advice.
A Fixed Deposit (FD) pays a guaranteed interest rate for a chosen tenure. Most Indian banks compound FD interest every quarter, so your interest starts earning interest four times a year.
Here P is the deposit, r is the annual rate, and t is the tenure in years. Quarterly compounding is why an FD's effective yield is slightly higher than its headline rate — a 6.5% FD compounded quarterly effectively yields about 6.66% per year.
FDs suit money you will need on a known date within a few years — an emergency fund's second layer, a near-term purchase, or capital you cannot expose to market swings. Remember that FD interest is taxed at your income-tax slab each year, which lowers the post-tax return considerably for higher slabs; that is worth comparing against debt mutual funds for longer horizons.
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