A Fixed Deposit (FD) offers guaranteed returns over a specific period. Interest is usually compounded quarterly in Indian banks.
Where: P = Principal amount, r = Annual interest rate, n = Compounding frequency per year, t = Tenure in years.
If you deposit ₹1,00,000 in a bank FD that offers a 7% annual interest rate (compounded quarterly) for 5 years. At the end of the term, the bank will pay you a guaranteed maturity amount of ₹1,41,478.