Question 1

How is FD interest calculated?

Accepted Answer

Most banks use quarterly compounding: A = P × (1 + r/4)^(4×t). Some use monthly compounding for higher effective rates.

Question 2

Is FD interest taxable?

Accepted Answer

Yes. FD interest is added to your income and taxed at your slab rate. TDS is deducted at 10% if interest exceeds ₹40,000/year (₹50,000 for senior citizens).

Question 3

Which bank gives highest FD rate?

Accepted Answer

Small finance banks (AU, Equitas) offer 7.5-8.1%. Post Office TD gives 7.5% for 5 years. SBI gives 6.5-7.1%. Check our FD rates comparison for latest rates.

Question 4

FD vs SIP — which is better?

Accepted Answer

FD gives guaranteed returns (6.5-8%) with zero risk. SIP gives higher returns (10-15%) with market risk. Use FD for short-term goals and emergency fund, SIP for 5+ year goals.

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