Fixed deposits remain the go-to for money you cannot afford to risk. Here is what ₹25,000 becomes in 7 years with quarterly compounding.
Maturity value by rate
| FD rate | Maturity value | Interest earned |
|---|---|---|
| 6% | ₹37,931 | ₹12,931 |
| 6.5% | ₹39,260 | ₹14,260 |
| 7% | ₹40,635 | ₹15,635 |
| 7.5% | ₹42,057 | ₹17,057 |
| 8% | ₹43,526 | ₹18,526 |
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 — for a 7-year horizon, compare with index SIPs for part of the amount. 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 three or four smaller FDs with staggered maturities. You keep liquidity without breaking the whole deposit (and paying penalty) in an emergency.
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