Compare two Fixed Deposit schemes with different rates, compounding frequencies, or bank tenures to find the best deal.
Plan A yields more returns than Plan B.
| Metric | Plan A | Plan B | Difference |
|---|---|---|---|
| Principal Deposit | — | — | — |
| Interest Rate | — | — | — |
| Tenure (Duration) | — | — | — |
| Compounding Frequency | — | — | — |
| Total Interest Earned | — | — | — |
| Final Maturity Value | — | — | — |
Fixed Deposits are one of the safest saving options available. Unlike market-linked options, bank FDs offer fully guaranteed interest rates that are locked in when you open the deposit.
In India, each depositor in a bank is insured up to a maximum of ₹5 Lakh for both principal and interest amount by the DICGC (Deposit Insurance and Credit Guarantee Corporation).
By default, Indian banks compound FD interest on a quarterly basis. Under quarterly compounding, interest earned every three months is added to your principal, meaning you earn interest on interest.
Comparing two FDs requires looking at the compounding frequency. A monthly compounding FD will give a slightly higher yield than a quarterly compounding one at the exact same nominal interest rate.
Compare the principal amount, interest rate, tenure, and compounding frequency (monthly, quarterly, half-yearly, or yearly). Additionally, look at bank credibility (safety ratings) and premature withdrawal terms.
Fixed Deposits in India usually compound interest quarterly. The higher the compounding frequency, the more interest you earn. For example, monthly compounding yields slightly higher returns than quarterly or annual compounding for the same interest rate.
Yes, bank Fixed Deposits are generally safer. Deposits in commercial banks are backed by DICGC insurance up to ₹5 Lakh per bank. Corporate FDs (offered by companies) offer higher interest rates to compensate for the default risk, but they are not insured.
Yes, most banks allow premature withdrawals. However, they usually charge a penalty (ranging from 0.5% to 1.0%), and the interest is paid at the rate applicable for the actual period the deposit remained with the bank, rather than the original contracted rate.
Interest earned on FDs is fully taxable. It is added to your annual income and taxed according to your marginal income tax slab. This is a key disadvantage compared to equity investments which enjoy lower tax rates.
Banks deduct 10% Tax Deducted at Source (TDS) if your total annual interest income across all FD accounts at a bank exceeds ₹40,000 (₹50,000 for senior citizens). If your total income is below the taxable limit, you can submit Form 15G or 15H to prevent TDS.
Yes, most banks offer a loan or overdraft facility against your FD, typically up to 90% to 95% of the FD value. The interest charged is usually 1% to 2% higher than the FD interest rate, allowing quick liquidity without breaking the deposit.
In a Cumulative FD, interest compounds and is paid out only at maturity, yielding higher final wealth. In a Non-Cumulative FD, interest is paid out periodically (monthly or quarterly), making it suitable for retired individuals seeking regular income.
Calculate maturity value and interest with flexible compounding options.
Compare mutual fund Systematic Investment Plans vs traditional fixed deposits.
Compare two monthly SIP schedules side by side.
Compare two bank loan EMIs side by side.
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