Fixed Deposit Calculator ( FD Calculator )

An FD calculator can be used online to determine the interest and the amount that it will accrue at the time of maturity. It is a simple tool available on the websites of most banks. The benefit of using a fixed deposit calculator is that it will help you to figure out how much your deposit will be worth at maturity based on the current interest rate for a specific term. It also helps you compare different tenures with different interest rates from various banks....Read More

Calculate your earnings with FD

Note:- Tenure rounded to nearest quarter.

You Get

Total Investment

Total Interest

Maturity Amount

Note: Compounding is occurring on quarterly basis.

Get Tax-Free##

Fixed Returns up to 6.27%*

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Get Returns in just 5 years

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Save tax up to Rs. 46,800##

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What is FD calculator?

A fixed deposit calculator is a tool that enables you to calculate the rate of interest you can earn on your deposit for a specific term. The FD calculator is simple to use and will help you to compare different tenures with different interest rates from various banks. It makes it easier for you to determine which bank and tenure would provide you with the largest fixed deposit maturity amount.

To calculate the maturity amount, it takes into account the principal amount, the term, and the applicable rate of interest. So, before you invest in a fixed deposit, use an online FD calculator to estimate your earnings ahead of time, allowing you to make a more informed financial decision.

Benefit Of FD Calculator

Importance of FD calculator

Investing in an FD, like any other financial decision, requires you to carefully assess your financial profile in tandem with your existing investments and future goals. Here’s how an FD calculator helps you in that process:

1.Simplifies Investment Calculation

Calculating the return on maturity of a fixed deposit can be a complicated process involving multiple variables. An FD Calculator helps you get accurate estimations without breaking a sweat.

2.Helps Evaluate the Associated Risk

Using an FD calculator allows you to see the returns that you will receive after a certain period. This can give you a sense of security since FDs are designed to reduce risk and provide guaranteed earnings. If you are a risk-averse investor, the FD calculator can help you understand how much you should invest in order to get the desired returns.

3.Time Saving Process

Not to mention, using an FD interest calculator significantly reduces the time spent on planning your investments. You can do complex calculations just at the click of a button.

4.Enables Comparison of FDs

The fixed deposit calculator can also be used to compare the many types of fixed deposit programmes offered by banks and other financial institutions. It is possible to determine which scheme delivers the best returns throughout the specified time period.

5.Helps You Create a Sound Financial Plan

Most importantly, having an estimation of the returns from an investment allows you to look at the bigger picture in life. You can simultaneously figure out other investment opportunities and diversify your portfolio to optimize the returns.

Formula to determine FD maturity amount

Calculating the maturity amount of an FD can be a complicated and time-consuming process. To help you calculate an FD maturity amount, one should make use of the FD interest calculator.

However, it is important to know the formula to determine the FD maturity amount.

The interest rates on FD is calculated using two methods - Simple Interest and Compound Interest. Depending on the deposit's term and size, banks may employ both. Here’s what an FD calculator does:

  • Simple Interest
  • 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.

    To take an example, if you deposit Rs.1 lakh at an interest rate of 10% p.a. for 5 years, then your interest amount at the time of maturity with a simple interest calculation will be the following:

    SI: P x R x T/100

    SI: 1,00,000 x 10 x 5/100 = 50,000

    Maturity amount at the end of the 5-year deposit tenure: Rs.1.5 lakh.

  • Compound Interest
  • This is the interest that is earned on both the principal amount and the interest amount. It is calculated by multiplying the interest rate with the principal amount raised to the number of periods, taken in years, for which the interest is compounded.

    A = P (1+r/n) ^ (n t)

    A = Maturity amount

    P = Principal amount

    r = rate of interest in decimals

    n = number of compounding in a year

    t = number of years

    For a deposit amount of Rs.10,000 that is kept for a tenure of 3 years at a quarterly compounding interest rate of 10%, the interest at the time of maturity would be:

    A= 10,000 {1 + (0.1/4)} ^ (4
    3)

    A = 10,000 (1 + 0.025) ^ (12)

    A = 10,000 (1.025) ^ (12) = Rs. 13,449 (approximately)

    Compound Interest (CI) = Maturity Amount – Principal Amount

    CI = 13,449 – 10,000 = Rs. 3,449

    Maturity amount at the end of the 3-year deposit tenure: Rs.13,449

FD deposit interest rates

These deposits typically offer a higher rate of interest, subject to certain terms and conditions. The amount you deposit in an FD is locked for a predetermined period which usually varies between 7 days and 10 years. Fixed deposit tenure options can vary from one bank to another.

The interest rate for FDs is fixed at the time of opening the deposit and independent of any fluctuations in the market. Some financial institutions even allow one to break their FDs prematurely by paying a certain penalty fee. The bank interest rate on a bank fixed deposit is pre-determined when the investment is made. Furthermore, it remains consistent over the investment duration. A few elements that influence fixed deposit interest rates are as follows:

  • 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.

How is interest on FD calculated?

Knowing how FD interest is calculated can help you gain more from your investment. Once you know the process that is used to calculate the returns, here’s what you need to do to use the FD calculator:

  • Choose the category of citizen you fall under. For instance, senior citizen, non-senior citizen.
  • Select the sort of fixed deposit you like, such as cumulative or non-cumulative.
  • Select the amount of your fixed deposit.
  • Select the duration for the fixed deposit.
  • Enter other necessary variables as mentioned in the FD calculator

The amount of interest earned, and the total amount earned at maturity will be displayed on the screen automatically.

Is FD 100% Safe?

Is FD 100% Safe

One of the most appealing aspects of a fixed deposit is the safety associated with the investment. This is what draws several investors to the idea of investing their money over a long term in a fixed deposit. So, if you are a risk-averse investor, it may be a favorable option for you since they only require a one-time deposit and are not subject to market volatility the way mutual funds might be.

However, the final decision for investment depends on your financial profile, investment goals, risk-appetite, time of investment and other such factors. Using an FD interest calculator may be helpful for you if you need help deciding whether fixed deposits are a good choice for you.

Step By Step Guide: How to Invest In FD?

Here are the steps to follow when you are investing in a fixed deposit:

  • Check FD Interest Rates
  • It's important to keep in mind that the rate of interest on FDs varies from one financial institution to the next. NBFCs and small finance banks, for example, may offer a greater rate of interest than commercial banks. Senior citizens are also eligible for higher interest on their investments.
  • Select a Tenure for the Investment
  • An FD scheme typically has a term ranging from seven days to ten years. You should choose an appropriate deposit tenure based on your needs. Financial experts typically recommend investing in FDs across different tenures to spread out interest rate-related risks while also facilitating liquidity.
  • Choose Interest Pay-out Frequency
  • After you've decided on the FD tenure, you can choose how often you'd like to receive interest payments. In general, you can choose the pay-out frequency to be monthly, quarterly, half-yearly or annually. You can also choose to reinvest the FD earnings once they are compounded quarterly.
  • Choose Deposit Mode
  • Finally, figure out which deposit method works best for you. In general, most financial institutions allow FD holders to deposit funds using internet banking or by visiting their local branch. Once you have decided the deposit mode, the next step is to fill out an FD application form and invest in a scheme.

    Feature And Benefits Of Fixed Deposit

    Before making an investment decision, it is always wise to familiarize yourself with key features of the financial instrument. To understand what a fixed deposit is, you must first understand its primary characteristics and the advantages it offers. The following are the most important:

  • Guaranteed Profits
  • 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.
  • Interest Rates
  • 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.
  • Flexible Tenure
  • 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.
  • Investment Return
  • 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.
  • Loan secured by a certificate of deposit
  • If you need money right away, you can take out a loan against your fixed deposit. This prevents your FD from being closed prematurely.
  • Safe Investment
  • 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.
  • Disciplined Savings Habit
  • 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.
  • Liquidity
  • 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.
  • Hassle-Free Investment
  • 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.
  • Tax Savings
  • 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.

    Fixed Deposit Eligibility Criteria

    The following entities are eligible to open an FD account in India:

    • Indian resident
    • NRI
    • Minors
    • Senior citizens
    • Companies
    • Partnership firms
    • Individuals or joint investors
    • Societies or clubs
    • Sole proprietorship

    Here are the documents Needed to Open Fixed Deposit Accounts:

    • Identity proof – Passport, PAN card, Voter ID card, Driving license, Government ID card, Photo ration card, Senior citizen ID card
    • Address proof – Passport, Telephone bill, Electricity bill, Bank Statement with Cheque, Certificate/ ID card issued by Post office

    You can visit the nearest branch of a bank that you have selected to open the FD with and get an application form. Or you can also download the application form from the official website of the bank.

    Frequently Asked Questions

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    Investors can choose the length of their lock-in period for their FD accounts. The only way to get out of the investment before it matures is to pay a penalty on the guaranteed interest rate, which is nothing but a loss.

    In most cases, closing an FD account or withdrawing partially before the end of the term incurs a penalty. The premature withdrawal penalty will vary from one bank to another.

    Yes, anyone can access the fixed deposit calculator online without paying any charges.

    The bank will deposit the maturity amount, which includes both the principal and interest, into the linked savings account with the bank. If you do not have a savings account with the bank, you can give the bank instructions on how you would like to receive the maturity money.

    The FD interest rates are subject to change from time to time. The policy rate, often known as the repo rate, serves as a fundamental baseline for determining FD and lending rates. Simply put, the RBI raises repo rates during periods of high inflation in order to absorb money from the market and regulate credit availability.

    Fixed deposit interest rates for senior citizen vary from one bank to another. Usually, banks offer higher FD interest rates than regular individuals. FD interest rates for senior citizens depend on the deposit amount, deposit tenure and the bank that you opt for.

    • Normal fixed deposits,
    • Tax saving fixed deposits
    • Senior citizen fixed deposits
    • Cumulative fixed deposits
    • Non- cumulative fixed deposits

    • Flexi fixed deposits

    ARN- PCP/FDC/260722

    Source:

    www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=82

    www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=3654

    www.incometaxindia.gov.in/Pages/tools/deduction-under-section-80c.aspx

    www.economictimes.indiatimes.com/wealth/calculators/fd-calculator

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