Fixed Deposit Calculator
A Fixed Deposit (FD) is a financial instrument provided by banks and financial institutions that offers investors a higher interest rate than a regular savings account, in exchange for locking up funds for a fixed period.
Plan Your Investment
Maturity Amount
₹0
Interest Earned
₹0
This FD Calculator is designed to help you understand how your FD investments grow, how interest is calculated, and assist you in planning your short-term and long-term savings goals.
Whether you’re looking for a safe investment option or planning for a specific financial milestone, you’ll find valuable information on FD benefits, the underlying formulas, practical examples to help in your investment decisions.
How to use this Fixed Deposit (FD) Calculator?
Using our FD calculator is straightforward. Follow these simple steps to get an instant estimate of your Fixed Deposit maturity amount:
- Enter Principal Amount: Input the initial amount you plan to invest in the Fixed Deposit.
- Enter Tenure: Specify the investment period in years.
- Enter Annual Interest Rate: Input the annual interest rate offered by the bank for your chosen FD.
- Select Compounding Frequency: Choose how often the interest is compounded (e.g., Annually, Half-yearly, Quarterly, Monthly).
- Click "Calculate": Once you've entered all the details, click on the "Calculate" button.
- View Results: The calculator will instantly display your estimated maturity amount and the total interest you've earned.
How can a Fixed Deposit Calculator help you?
A Fixed Deposit (FD) calculator is an essential online tool that simplifies the process of estimating your maturity amount and interest earnings from an FD. Instead of manually performing calculations, this FD calculator helps you gain immediate clarity on your potential returns, helping you to make smart savings choices.
It allows you to quickly input your principal investment amount, your desired investment tenure, and the prevailing interest rate. You can also choose the compounding frequency that suits your needs. In return, it provides you with an accurate projection of your total maturity value and the total interest you’ve earned. This helps you plan your savings effectively, understand the power of compounding on your fixed deposits, and make informed decisions about your personal financial journey. It’s particularly useful for setting your savings goals, and comparing different FD options.
Formulas used for Calculating Fixed Deposit Returns
Fixed Deposits can be calculated using either simple interest or compound interest, depending on the terms offered by the bank and your chosen interest payout frequency.
Simple Interest Formula:
The simple interest formula is used when interest is paid out regularly (e.g., monthly, quarterly, half-yearly) and not reinvested into the principal.
- I (Interest Earned): The total interest you will earn over the tenure.
- P (Principal Amount): The initial amount you invest in the FD.
- R (Annual Interest Rate): The interest rate offered by the bank, expressed as a decimal (e.g., 7.0% would be 0.07).
- T (Tenure): The investment period in years.
Compound Interest Formula:
The compound interest formula is used when the interest earned is reinvested into the principal, allowing your interest to earn further interest. This is typically the case for FDs where interest is compounded periodically (e.g., quarterly, annually) and paid at maturity.
- A (Maturity Amount): The total amount you will receive at the end of the FD tenure, including your principal and compounded interest.
- P (Principal Amount): The initial amount you invest in the FD.
- R (Annual Interest Rate): The interest rate offered by the bank, expressed as a decimal (e.g., 7.0% would be 0.07).
- N (Number of Compounding Periods per Year): How many times the interest is compounded annually (e.g., 1 for annually, 2 for half-yearly, 4 for quarterly, 12 for monthly).
- T (Tenure): The investment period in years.
The total interest earned () would then be .
An Example: Fixed Deposit Investment at 7.0%
Suppose you decide to invest ₹5,00,000 (Five Lakhs) in a Fixed Deposit for a period of 5 years, with an annual interest rate of 7.0%, compounded quarterly. Over this tenure, your principal will grow steadily, thanks to the compounding effect. This example highlights how a consistent investment in an FD can provide predictable returns for your financial goals.
Here’s a detailed table showing the compounding of your ₹5,00,000 investment over 5 years at a 7.0% annual interest rate, compounded quarterly:
| Period (Quarter) | Year | Opening Balance (₹) | Interest Rate (Quarterly) | Interest Earned (₹) | Closing Balance (₹) |
|---|---|---|---|---|---|
| 1 | 1 | 5,00,000.00 | 1.75% | 8,750.00 | 5,08,750.00 |
| 2 | 1 | 5,08,750.00 | 1.75% | 8,903.13 | 5,17,653.13 |
| 3 | 1 | 5,17,653.13 | 1.75% | 9,058.93 | 5,26,712.06 |
| 4 | 1 | 5,26,712.06 | 1.75% | 9,217.46 | 5,35,929.52 |
| 5 | 2 | 5,35,929.52 | 1.75% | 9,378.77 | 5,45,308.29 |
| 6 | 2 | 5,45,308.29 | 1.75% | 9,542.90 | 5,54,851.19 |
| 7 | 2 | 5,54,851.19 | 1.75% | 9,709.90 | 5,64,561.09 |
| 8 | 2 | 5,64,561.09 | 1.75% | 9,879.82 | 5,74,440.91 |
| 9 | 3 | 5,74,440.91 | 1.75% | 10,052.72 | 5,84,493.63 |
| 10 | 3 | 5,84,493.63 | 1.75% | 10,228.64 | 5,94,722.27 |
| 11 | 3 | 5,94,722.27 | 1.75% | 10,407.64 | 6,05,129.91 |
| 12 | 3 | 6,05,129.91 | 1.75% | 10,589.77 | 6,15,719.68 |
| 13 | 4 | 6,15,719.68 | 1.75% | 10,775.09 | 6,26,494.77 |
| 14 | 4 | 6,26,494.77 | 1.75% | 10,963.66 | 6,37,458.43 |
| 15 | 4 | 6,37,458.43 | 1.75% | 11,155.52 | 6,48,613.95 |
| 16 | 4 | 6,48,613.95 | 1.75% | 11,350.74 | 6,59,964.69 |
| 17 | 5 | 6,59,964.69 | 1.75% | 11,549.38 | 6,71,514.07 |
| 18 | 5 | 6,71,514.07 | 1.75% | 11,751.49 | 6,83,265.56 |
| 19 | 5 | 6,83,265.56 | 1.75% | 11,957.15 | 6,95,222.71 |
| 20 | 5 | 6,95,222.71 | 1.75% | 12,166.40 | 7,07,389.11 |
Total Investment: ₹5,00,000
Total Interest Earned: ₹2,07,389.11
Maturity Amount: ₹7,07,389.11
Please note: This example assumes a fixed interest rate and quarterly compounding. Actual interest calculation methods and rates may vary between banks.
Advantages of Using a Fixed Deposit Calculator
An FD calculator offers numerous benefits for individuals planning their savings:
- Accurate Projections: It provides precise estimates of your maturity amount, eliminating manual errors and giving you confidence in your financial planning.
- Time-Saving: Instead of complex manual calculations, you get instant results, saving you valuable time and effort.
- Financial Planning: Helps you set realistic savings goals for specific needs like a down payment, a child's education, or a significant purchase, by showing you the potential growth of your investment.
- Compare Options: Enables you to quickly compare returns from different banks or varying tenures and interest rates, helping you choose the most suitable FD for your needs.
- Understanding Compounding: Visually demonstrates how compounding works, allowing you to see how reinvested interest can significantly boost your total returns over time.
- Informed Decision Making: Provides clear data to help you make informed decisions about your FD investments and overall savings portfolio.
- Accessibility: Easily accessible online, allowing you to calculate your FD returns anytime, anywhere.
Frequently Asked Questions (FAQs) around Fixed Deposits
Here are some common questions about Fixed Deposits
How is interest calculated on an FD?
Interest on an FD can be calculated using simple interest (if paid out regularly) or compound interest (if reinvested). The compounding frequency (e.g., quarterly, annually) affects the total interest earned.
Is the interest earned on FDs taxable?
Yes, the interest earned on Fixed Deposits is fully taxable as per your income tax slab. Banks also deduct TDS (Tax Deducted at Source) if the interest earned exceeds a certain limit in a financial year.
Can I break my FD before maturity?
Yes, most FDs can be prematurely withdrawn, but it usually comes with a penalty (e.g., a reduction in the interest rate by 0.5% to 1% from the contracted rate). Some FDs may not allow premature withdrawal.
What is the minimum and maximum tenure for an FD?
The minimum tenure for an FD typically ranges from 7 days, and the maximum can go up to 10 years, depending on the bank.
Are FDs safe?
FDs are generally considered safe investments, especially those with scheduled commercial banks. Deposits up to ₹5 lakh per bank are insured by the DICGC (Deposit Insurance and Credit Guarantee Corporation).
Can I take a loan against my FD?
Yes, most banks allow you to take a loan against your Fixed Deposit. The loan amount can typically be up to 90-95% of the FD value, and the interest rate charged on the loan is usually 1-2% higher than the FD interest rate.
Disclaimer: The above content is for informational purposes only and is not meant to be taken as investment, financial, or any other kind of advice. This is not a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments.
