Fixed Deposit Calculator- The Perfect tool to Calculate the Interest on a FD

Fixed deposits have proved to be the best mode of investment for investors. A fixed deposit guarantees you safer returns and there is no involvement of risk at all. You are assured of the fact that the invested amount will be given to you along with the interest.

In case, you want to secure for your future, you can always invest your hard earned money into a fixed deposit scheme. The rate of return of a Fixed deposit is predetermined and remains the same till the time the deposit matures. After the maturity of the deposit the principal amount along with the accumulated interest is credited back in the account of the investor.

You can get the return either at the time of maturity or the time decided by you. The interest can be given to the investor quarterly or monthly or cumulatively. In case, you want to have a short term deposit, you can opt for the same too.

So have you too made your mind and wish to open a fixed deposit account? If yes, then that’s great as the investment you make can fetch good returns. But what about the interest you will be getting on your FD? I believe you will be saying, that’s quite difficult to calculate. That is no more the case. You can easily calculate the interest by using a tool called fixed deposit calculator.

Fixed Deposit Calculator is a tool which has been created to compute and calculate the maturity value of the deposit. You can calculate the interest receivable on the fixed deposit for a specified period of time by using this calculator. Within few seconds you will receive the information on your screen. The realistic result will be displayed before you when you type the FD interest rate, the deposit amount and the investment period. You will be saving a lot of time by using this tool when compared to manual calculation.

The value which will be displayed on the screen is calculated using the interest calculator formula given below-

A = P (1 + r/n) nt

I  = A - P

As a matter of fact, the interest which is paid on fixed deposits can be determined using two methods viz simple interest method and compound interest method.

Simple Interest Method – The interest is calculated on a simple interest method on the initially deposited amount for the complete deposit period. The interest which is received remains the same in the entire duration of the deposit. The returns received on the same are on the lower side.

Compound Interest Method – In case, compound interest method is used, the deposits fetch higher returns. The amount of interest which is earned in the last period is added to the initial principal. The new amount which comes is then taken into consideration to calculate the amount for the next period. This clearly means, the principal amount keeps on changing in this method throughout the duration of the deposit.

To make things crystal clear for you, I am going to compare the interest calculated on fixed deposits by using both the methods. Let’s take the help of an example to illustrate the earnings a fixed deposit will fetch on both the methods.

Suppose Abhishek Ranjit, the programming head of Colors channel, makes a deposit of ₹ 20,000 for a tenure of 10 years. The rate of interest on the same is 7.00% per annum. Now let’s calculate the interest fetched by using both the methods.

Simple Interest Method:

Deposit Amount -₹ 20,000

Interest Rate – 7.00% p.a.

Tenure – 10 years

Interest Amount - ₹ 14,000

Maturity Amount - ₹ 34,000

The simple interest has been calculated by using the formula given below

A = P (1 + rt)

Where:

A = Maturity Value

P = Principal Amount

I = Interest Amount

r = Rate of Interest per year in decimal

t = Time Period involved in months or years

Compound Interest Method:

Deposit Amount - ₹ 20,000

Tenure – 10 years

Interest Rate – 7.00% p.a.

Interest Amount – ₹ 20,031

Maturity Amount – ₹ 40,031

The compound interest has been calculated by using the formula given below:

A = P (1 + r/n) nt

Where,

A = the maturity value
P = the initial deposit amount
r =  the annual interest rate
n = the number of times that interest is compounded per year
t = the number of years

From the above example, it is very clear that the interest Abhishek is earning from using a compound interest method is higher than a simple interest method. You can now easily calculate the interest earned by taking help of a fixed deposit calculator.

Fixed Deposit Calculator benefits

A fixed deposit calculator has made things easier for us when it comes to checking out the total interest receivable. Let’s make a look at the benefits of using the same.

Highly Accurate- The tool is designed to calculate the interest component and the sum of maturity at the highest levels of accuracy. You are simply required to enter the principal amount, the tenure period and rate of interest. Within few seconds you will receive information related to the maturity sum and the total interest earned.

Easy and convenient to Use- One can easily use the tool as there is nothing complicated with it. Just feed in the details and get the desired result. It is as simple as that.

Saves a lot of time- In case you had to calculate the interest manually, you would have consumed a good amount of time. The complex formula would have given you jitters. But the tool saves a lot of time for you as even the complex calculation is done within a fraction of a second.

A Fixed deposit calculator has proved to be beneficial for those who wish to calculate the interest earned so that they can gain maximum benefits. You can now compare the interest earned on various fixed deposit schemes and take a balanced decision accordingly.

Calculate Fixed Deposit to Know Magnitude of Your Returns

The customers of any bank have the leverage to calculate their returns on fixed deposit. They can do so by using the Fixed deposit calculator which gives them the return on their Principal when interest is paid on quarterly compounding. The effective yield is the actual return which gets actually generated on the Fixed Deposit. It is based on the rate of interest and the frequency of compounding. Many banks in India do the compounding on a quarterly basis and thus the Fixed Deposit Calculator can be used to know the maturity value of fixed income deposits/securities.

Most of the banks in India such as SBI, PNB, ICICI Bank, HDFC Bank, IDBI Bank, Bank of India, Corporation Bank, Bank of Baroda offer fixed deposit schemes and use the FD formula for arriving at the maturity value of fixed deposits.

Compound Interest Formula-

When interest component gets added to the principal amount so, from that moment, the interest that has already been added also itself accrues interest. This interest added to the principal amount is called compounding. The following formula gives the total amount which gives the compounding value as:

A= P(1+r/n)nt

Where,

A = Final Amount that will be obtained

P = Principal Amount (i.e. initial investment)

r =  Annual nominal interest rate (as a decimal i.e. if interest is paid at 5.5% pa, then it will be 0.055)

n = number of times the interest is compounded per year (i.e. for monthly compounding n will be 12, for half year compounding it will be 2 and for the quarter it will be 4).

t = number of years

Note : To arrive at the interest amount you can further use the formula Interest = A - P

Simple Interest Formula-

Simple Interest is used to calculate the FD interest rate on your deposit amount. Interest is always dependent on the original principal amount or sum invested. In this calculator, simple interest is calculated by multiplying the principal amount by the number of periods i.e. time interval.

 SI Interest = (P * R * T ) / 100

SI =Simple Interest

P=Principal amount

R=Rate of Interest

T= Tenure or time period

FD Calculator Monthly Interest-

Fixed Deposit Monthly Interest Calculator is used to calculate the interest you would like to earn based on the Deposit Amount, Rate of Interest and Deposit Period.

Deposit Amount: Whenever a customer opens an FD account, the deposit is made only once and the minimum amount starts as low as ₹ 1000 and can go upto ₹ 10 crores or above.

Rate of Interest : The interest payout or compounding frequencies varies from bank to bank on their FD schemes. The interest rates are usually done on a quarterly, half-yearly or annual basis. However, the interest rate for a tax-saving FD is ascertained at the beginning of every financial year by the government and is identical across the banks.

Deposit Period: The deposit period of FD ranges anywhere between 7 days and 10 years. It differs from bank to bank. The longer the tenure a customer may choose, the higher will be the interest rate subject to the selection of FD.

Deposit Maturity Calculator-

An investment of ₹ 1,000.00 for 12 months will fetch you interest at 6.00% p.a. and will give you a maturity value of around ₹ 1,060.00.

Benefits of Investing in FD-

Guaranteed Returns : FD is a secured investment instrument which gives guaranteed returns on the amount invested.

Develops saving habit : The investment made in an FD is blocked for a fixed time period which inculcates the habit of saving.

Better returns than savings account : It provides better returns as against savings account as the interest rate is higher. In a savings account, you can earn interest upto 4% as compared to the starting rate of 6% in an FD.

Early withdrawal : Invested amount in FD can also be withdrawn earlier prior to the maturity date by paying a penalty charge.

Interest payment available at different tenures :  Interest is payable only at maturity, annually or monthly depending on the time period chosen by the customer.

Flexible tenure: The customers have the flexibility to enjoy different tenure options and block their money as long as they want. They can invest their money for a time period ranging from 7 days to 10 years.

Grow your investment through Fixed Deposit Calculator

Do you wish to know how much interest your principal amount may have at the end of the year? Use fixed deposit calculator to ascertain the total amount of investment you may get after the maturity period. It is a necessary thing to do beforehand as you can decide on the interest rate and tenure for the amount you wish to employ in any of the fixed deposit schemes with your bank. If you start investing early without postponing further, chances of earning fair returns for the longer term becomes stronger.

Fixed deposit calculator shows you the road map where your investments are heading to when it comes to planning your investment by deploying only FD as your financial instrument. The compounding of interest every year, if you keep on automating your FD post-maturity substantiate better returns until your retirement period.  

Fixed Deposit Calculator Components-

Fixed Deposit Tenure:

The customers have the flexible option to choose their time period or tenure for which the sum gets invested or blocked. You can get your FD for a tenure ranging between 7 days and 10 years. Different banks or financial institutions provide different tenure options. However, it is best if you compare fixed deposits provided by different financial institutions and banks and then make a  choice wisely. It is to be noticed that the tenure you decide will also help you to select the interest rate which the bank ultimately offers you. The longer the tenure higher would be the FD interest rate.

Fixed Deposit Interest Rate:

The interest rate on FD is higher as against your savings bank account and depends upon the Fixed Deposit amount and tenure. Interest rates on Fixed Deposit differ from one bank to another, however, several customers tend to compare Fixed deposit rates of different banks to make a smart choice. The interest payout or compounding frequencies differ from FD-to-FD, is generally based upon quarterly, half-yearly or annually basis. However, it is to be considered that the interest rate for tax-saving FD is ascertained at the beginning of every financial year by the government and is similar across banks.

Investment amount: Investment in a fixed deposit is made only once and the minimum amount required for opening an FD tends to differ from different banks and financial institutions. However, customers are required to start with as low as ₹ 1000 and invest even upto ₹ 10 crores and more.

Benefits of Fixed Deposit Calculator- Let's see how you make your investment grow in leaps and bounds by using fixed deposit calculator:

Accuracy: Fixed deposit calculator helps you to ascertain the accurate results which can be calculated by taking into account both the interest rate and the sum of maturity. With a mere entry of the principal value, the rate of interest, period of deposit and compounding frequency, the calculator shows you the expected maturity sum which includes the interest component.

Easy to Use: The calculator is simpler and easier to use while entering the details of principal, tenure and rate of interest. And then what happens, you may get spontaneous result from the calculator which is expected to achieve at the end of the maturity period.

Time-Saving: The calculator saves your precious time by eliminating all the requirements of getting the result arriving out from a complex formula. The entry of key variables such as principal amount, interest rate and tenure, will let you calculate the sum.

Now you know about fixed deposit calculator, next to know about several interest rates and tenure which the most trusted and widely chosen bank deploys the same in the financial marketplace.

SBI Fixed Deposit Interest Rates-

State Bank of India is the largest, reputed and the strongest banking institution of India. It is widely considered by customers across India with an assured belief that their money strive to get protection. which are in accordance with the Governmental rules and regulations. Whether you are a salaried or a self-employed businessman or a non-working professional having small or big dreams, fixed deposit is the best investment avenue where you can park away your money to get handsome returns in the longer term.

The interest rates applicable to general public are as follows :

• 7 days to 45 days the rate of interest is 3.75%
• 46 days to 210 days the rate of interest is 3.85%
• 211 days to less than 1 year the rate interest is 4.00%
• 1 year to less than 3 years the rate of interest is 6.00%
• 3 years to 10 years the rate of interest is 5.50%

The interest rates applicable to senior citizen are as follows:

• 7 days to 45 days the rate of interest is 4.25%
• 46 days to 210 days the rate of interest is 4.35%
• 211 days to less than 1 year the rate of interest is 4.50%
• 1 year to less than 3 years the rate of interest is 4.75%
• 3 years to 10 years the rate of interest is 4.75%