FD Calculator

This is a pre-fixed rate of interest at a fixed period of time. It is calculated by multiplying the rate of interest per annum, the principal amount, and the tenure in years.

Simple Interest on Fixed Deposit

• The formula of simple interest is P X R X T/ 100
• Where P = invested amount
• R = Rate of Interest
• T = Time/ investment tenure

Example on Simple Interest

• Let’s understand the formula through an example.
• Suppose Tooba invests INR 15,000 for 5 years, accumulating a fixed interest of 10%,
• Then, as per the formula,
• SI = 15,000 X 10 X 5/ 100
• = INR 7,500
• Making the maturity amount to be, 15,000 + 7,500 = INR 22,500

Compound Interest on Fixed Deposit

• The formula for compound interest is,
• A = P (1+ r/n) ^ (nt)
• Where A = Maturity amount,
• P = Amount invested
• R = Rate of Interest
• N = Number of compounding in a year
• T = Investment tenure

Example on Compound Interest

• Let’s say Indrani invests INR 15,000 for 5 years and earns an interest of 10% which is compounded quarterly, now as per the formula,
• A = P (1+ r/n) ^ (nt)
• = 15,000 (1 + 0.10/4) ^ (4X5)
• = INR 24,579 (approximately)
• The maturity amount can be calculated manually, using these formulas. However, it is recommended that you use an FD calculator online to save yourself from the hassle and complexities of the calculation process. It is not only time-consuming but complex. An FD calculator, on the other hand, would give you error-free results in a matter of minutes.

• The duration of the investment is a component that influences the interest rate; the longer an investor stays engaged, the greater the interest rate will be.

• Senior citizens gets a higher rate of interest than the standard fixed deposit interest rates for regular individuals. The additional rate of interest for senior citizens also varies from one bank to another and can change anytime without any prior information. A preferred interest rate is the term for this extra interest. The age at which a person is deemed a senior citizen varies from one bank to the next.

• The current state of the economy is also a direct determinant. To determine interest rates, financial institutions and banks evaluate economic variables such as the repo rate and inflation rate.

A fixed deposit's returns are guaranteed. You will receive the same rate of return that was agreed upon when the FD was opened. This is not the case with market-led investments, which provide returns depending on market interest rate swings. Even if interest rates fall, you will receive the same rate of interest that was agreed upon. As a result, the fixed deposit is more secure than other types of investments.

A fixed deposit's interest rate fluctuates depending on the term you choose. It will also depend on the bank or the NBFC you choose to go with to open a fixed deposit account.

A fixed deposit's term is variable and determined by the depositor. Each bank has its own minimum tenure requirements; nonetheless, the depositor has the last say. It is also possible to choose whether to redeem or extend the fixed deposit for the same amount of time.

The amount of interest you earn on a fixed deposit is determined by the FD's maturity duration or tenure. You will earn a greater interest rate if you have a longer tenure. Furthermore, the returns on your investment are determined by whether you choose to receive interest on a regular basis or reinvest the money, which is known as a cumulative FD. With this FD, you get the benefit of compounding. You can easily use an FD return calculator to determine the value of your investment.

If you need money right away, you can take out a loan against your fixed deposit. This prevents your FD from being closed prematurely.

Fixed-income securities are risk-free investments. FDs, unlike other investment options, are not based on market conditions. At the end of the maturity period, you will get a guaranteed sum of money. For risk-averse investors, this is an appealing investment.

Since fixed deposit accounts compel the holder to invest a lump sum amount for a set length of time, the holder will automatically save money in the long run. Hence, fixed deposits can also be considered an excellent savings vehicle. When you are planning your investments, you can use an FD calculator to determine the savings and return amount.

When you can readily turn an asset into cash, it is considered liquid. Although there will be a penalty, FDs can be withdrawn whenever they are needed. As a result, you'll always have a certain amount of money to fall back on.

If you already have a savings account, you can open an FD with a few clicks or by going to your local branch. You don't have to bother about it after you open it until it grows. You can have your maturity instructions automatically renew or credit your account with the maturity proceeds.

If you want to save money on taxes, choose a five-year tax-saving FD and take use of the deductions under Section 80C of the Income Tax Act.