Compounding of Interest on Fixed Deposit Receipts (FDRs)
Interest on Fixed Deposit Receipts (FDRs) is compounded at regular intervals. The compounding frequency determines how often the interest is added to the principal amount.

Quarterly Basis
- In the case of FDRs, interest is commonly compounded on a quarterly basis.
- This means that the interest earned in each quarter is added to the principal amount, and subsequent interest is calculated based on the updated total.
- Compounding on a quarterly basis leads to a higher effective interest rate compared to compounding on a less frequent basis such as semi-annually or annually.
- Quarterly compounding allows investors to earn more interest on their investment over time, as the interest is reinvested more frequently.

Benefits of Quarterly Compounding
- The more frequent compounding intervals result in a higher effective yield for the investor.
- Investors can benefit from the power of compounding, as interest is earned not only on the principal amount but also on the interest accrued.
- Quarterly compounding can help investors grow their savings faster and accumulate more wealth over time.

Conclusion
In summary, interest on Fixed Deposit Receipts (FDRs) is commonly compounded on a quarterly basis. This compounding frequency allows investors to maximize their returns and take advantage of the benefits of compounding.