Fixed Deposit Calculator
Fixed Deposit is a financial instrument provided by banks or NBFCs. It is a form of investment offering high rates of interest (as compared to bank savings account). It is a very famous form of investment in India attracting huge customer who are looking for higher interest on their investment. It is a type of term deposit and has low risk. It provides assured returns in the form of interest which is fixed for the whole maturity period. The interest rates offered may be different from bank to bank…read more
Type of Customer
Type of Fixed Deposit
Date of Fixed Deposit31 Jan 2020
FD Maturity Details
Interest Amount 356,495
Amount and Interest
What is a Fixed Deposit?
Fixed Deposit is a financial instrument provided by banks or NBFCs. It is a form of investment offering high rates of interest (as compared to bank savings account). It is a very famous form of investment in India attracting huge customer who are looking for higher interest on their investment. It is a type of term deposit and has low risk. It provides assured returns in the form of interest which is fixed for the whole maturity period. The interest rates offered may be different from bank to bank.
Interest earned on Fixed Deposit can be reinvested or can be paid at regular interval, depending on the investor’s choice. The maturity amount of the fixed deposit is paid to the investor at the end of the tenure. The interest earned can be Monthly, Quarterly, Cumulative or Standard. You may or may not be required to create a separate account for fixed deposit.
Benefits of Fixed Deposit:
- It is well suited for senior citizens are interest rate for senior citizen are higher on fixed deposits
- It is an extremely safe investment with low risk
- It provides stable and assured returns along with flexible tenure options
- No tax deduction at source on Interest payments upto Rs 5,000 per annum
- The maturity amount at the end of the period will be auto credited to your account hereby providing you ease and safety.
Calculation of Fixed Deposit Maturity Amount:
The interest on a bank fixed deposit with tenure of less than 6 months is calculated at simple interest and is considered on number of days of fixed deposit. Whereas, in case of fixed deposits of tenure of 6 months or more is calculated at compound interest which is compounded quarterly. In quarterly compounded interest, the interest earned during the previous quarter is added to the principal amount and interest for another quarter is calculated on the amount at the starting of the quarter.
The formula for calculating Fixed Deposit:
There are two methods to calculate the interest on the fixed deposit.
Simple Interest Method -
For fixed deposits of less than 6 months, simple interest method is used. It is simple and easy method with interest on the principal amount for the whole tenure.
Formula: Simple Interest = P X T X R /100
P is the Principal
R is the Rate of Interest
T is the Tenure of Fixed Deposit.
After calculating the interest, you need to add the interest with the principal amount invested to calculate the maturity amount.
- Maturity Amount = Principal + Interest
Compound Interest Method -
Compound Interest is the interest earned on principal as well as on interest. The interest accumulated for a quarter can be reinvested and the interest for the next quarter will be calculated on both the principal and interest of the first quarter. This subsequently gets added and keeps accumulating for subsequent years. It is very beneficial interest method which provide higher interest as compared to simple interest method. You must note that in India, banks use quarterly compounding to calculate interest in rupee.
The Formula for
Compound interest - A = P(1+r/n) ^ (n*t)
P is the Principal Amount
R is the Rate of Interest
A is the Maturity Amount
t is the number of years
And n is the Number of compounding in a year (In India, it is 4 times)
Compound Interest earned over 3 years = Maturity amount – Principal Amount.
Example - Suppose you invest Rs5,00,000 as Fixed Deposit for a tenure of 3 years at 7% interest compounded on reinvestment cumulative basis.
Amount = 5,00,000 X (1+0.07/4) ^(4*3) = 6,15,720
Therefore, Interest = 6,15,720 – 5,00,000 = 1,15,720
Fixed Deposit Calculator Online
Fixed deposit calculator is an online tool to estimate the maturity amount expected by the investor at the end of the tenure for a specific amount at the applicable rate of interest. It is a simple tool and can be used to calculate the maturity amount easily. The calculator not only helps you to identify the maturity amount but also shows the interest earned on your fixed deposit. This tool requires following details to calculate the maturity amount.
- Deposit amount
- Tenure of the fixed deposit
- The prevailing fixed deposit rate for the said tenure
How does the Fixed Deposit Calculator work?
The Fixed Deposit Calculator is used to calculate the interest you can earn on a fixed deposit for a specific tenure. It is very easy and simple tool. It requires the following basic details to calculate the interest.
- Principal- It is the amount of fixed deposit you want to make as investment. It can be any amount of Rs5,000 or above.
- Tenure- It is time period you invest your money in fixed deposit with the bank. The minimum tenure of your bank FD can be as low as 7 days.
- Interest depending on your suitability- There are four types of interest offered by banks:
- Cumulative Reinvestment Interest- In this interest method, you Interest is cumulated and reinvested in the fixed deposit for all the subsequent quarters
- Quarterly Pay-out- You will receive the sum at the end of the quarter in every 3 months
- Monthly Pay-out- It pays you the sum of interest at the end of every month
- Short term fixed deposit- This interest method is for short term investment for a period of 7 days to 180 days.
Factors Affecting Fixed Deposit Interest Rates:
The Interest offered by the bank on your fixed deposit is influenced/affected by the following causing increase/decrease in the interest rate offered by banks.
- Tenure or period of deposit
- Current Economic Conditions
- Fixed provider- Company or Bank
- Age of the applicant
Benefits of Fixed Deposit Maturity Calculator:
- The tool is free of cost enabling you use it multiple times and compare returns for different combinations of fixed deposit rates, tenure and amount.
- Saves time and effort for big calculations and completing eliminate the chance of error as it’s an automatic calculator.
- It helps you to anticipate and plan your future finances well.
- It enables you to compare fixed deposits of various types offered by banks and financial companies and check which scheme provide best returns.
- It is free of uncertainty of investment like mutual fund where returns are not guaranteed. It is the most safe investment option.
- It is a very important tool to determine your own needs and choose the right option correctly.
How to calculate maturity amount using Fixed Deposit Maturity Calculator Online?
Calculating the maturity amount using the Fixed Deposit Calculator is a simple process. Here are the steps to follow to use the fixed deposit calculator.
- Go to the bank site offering fixed deposit to their customers
- Choose your customer type: (New Customer/Senior Citizen/ Existing Loan Customer)
- Choose your Fixed Deposit type: (Cumulative Interest/ Non Cumulative Interest)
- Fill in the Fixed Deposit amount in the column provided.
- Choose your preferred tenure of fixed deposit(Years, months, and days as per your choice)
- Fill in the interest rate as per current economy(May be auto filled for some banks)
- Click on "Calculate"
- The calculator will automatically show you the total amount you will receive at maturity or end of the tenure of your investment.
- The table will reflect the principal amount, the maturity amount and segregated interest earned.