6 hours ago · There are two types of interest on fixed deposits, which are categorised based on the interest calculation method – simple interest and compound interest. The financial organisation where you hold the FD may use the calculation method based on the tenure and the deposit amount.
When interest is added to the principal of a deposit or loan, so that, from that moment on, the interest that has been added also earns interest
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest. Compound interest is standard in finance and economics. Wikipedia
