Fixed deposits remain the go-to for money you cannot afford to risk. Here is what ₹25,000 becomes in 2 years with quarterly compounding.
Maturity value by rate
| FD rate | Maturity value | Interest earned |
|---|---|---|
| 6% | ₹28,162 | ₹3,162 |
| 6.5% | ₹28,441 | ₹3,441 |
| 7% | ₹28,722 | ₹3,722 |
| 7.5% | ₹29,006 | ₹4,006 |
| 8% | ₹29,291 | ₹4,291 |
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 ₹25,000 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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