Fixed deposits remain the go-to for money you cannot afford to risk. Here is what ₹50,000 becomes in 1 year with quarterly compounding.
Maturity value by rate
| FD rate | Maturity value | Interest earned |
|---|---|---|
| 6% | ₹53,068 | ₹3,068 |
| 6.5% | ₹53,330 | ₹3,330 |
| 7% | ₹53,593 | ₹3,593 |
| 7.5% | ₹53,857 | ₹3,857 |
| 8% | ₹54,122 | ₹4,122 |
Keep it honest against inflation
At ~6% inflation, the real (purchasing-power) return of a 7% FD is roughly 1%. FDs are for capital safety and near-term goals. Interest is taxable at your slab, so the post-tax return is lower than the sticker rate.
Laddering tip
Instead of one ₹50,000 FD, split into two smaller FDs with staggered maturities. You keep liquidity without breaking the whole deposit (and paying penalty) in an emergency.
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