Assumes monthly compounding at a constant annual rate for the whole period -- real market returns vary year to year, so treat this as an illustrative projection, not a promised outcome.
Is a fixed deposit still worth it compared to other options?
It depends on your goal -- fixed deposits offer safety and a guaranteed return, which suits short-term goals or emergency funds, but their returns often barely keep pace with inflation after tax. For long-term goals, market-linked options have historically outperformed fixed deposits, at the cost of guaranteed safety.Read more: Compound Interest Calculator: How a Lump Sum Actually Grows
What's the difference between simple and compound interest?
Simple interest is calculated only on the original principal for the entire period. Compound interest is calculated on the principal plus any interest already earned, so the amount it's calculated on grows over time. Compounding produces a meaningfully larger result the longer the money is invested.Read more: The Boring Years Are Where the Money Gets Made
How much emergency fund should I keep?
A common guideline is 3-6 months of essential expenses in an easily accessible account, though this varies by job stability, dependents, and other safety nets available to you. It should be liquid and low-risk, not invested for growth, since the point is availability when you need it, not returns.Read more: Tax Deferral Strategies in the US: The Ones You Can Use and the Ones You Can’t Afford
Are savings account returns taxable?
Generally, yes -- interest earned is typically taxable as regular income, though some jurisdictions offer a small exemption threshold on savings interest specifically. Check the current rule where you file, since this is one of the more frequently adjusted thresholds.Read more: High-Yield Savings Calculator: What Switching Banks Is Actually Worth
Estimates only, not financial advice. See our Disclaimer.
