FD CALCULATOR
FD
Total Invested Amount
Rs. 0
Total Interest Amount
Rs. 0
Total Return Amount
Rs. 0
What is the Fixed Deposit Calculator?
The FD Calculator estimates returns from fixed deposit investments based on principal amount, interest rate, and deposit period. This tool helps you calculate the maturity value of your FD.
Different Types of Formulas Used to Calculate Fixed Deposit (FD) Maturity
Fixed Deposits (FDs) are one of the most popular investment options offering secure returns. Maturity can be calculated using different methods based on the type of interest—Simple Interest or Compound Interest.
1. Simple Interest Formula
Simple Interest is calculated on the principal amount for the entire duration of the deposit.
Formula: A = P + (P × r × t)
where:
- A is the maturity amount
- P is the principal amount
- r is the annual interest rate (in decimal)
- t is the time in years
2. Compound Interest Formula
Compound Interest calculates interest on the principal as well as on the interest earned in previous periods. This method provides higher returns compared to Simple Interest.
Formula: A = P(1 + r/n)nt
where:
- A is the maturity amount
- P is the principal amount
- r is the annual interest rate (in decimal)
- n is the number of compounding periods per year
- t is the time in years
Understanding how Fixed Deposit (FD) returns work can be simplified with an example. Let’s say you invest a principal amount of Rs. 1,00,000 in an FD scheme with an annual interest rate of 6% for a tenure of 5 years. Below are calculations for both Simple Interest and Compound Interest.
1. Simple Interest
The formula for Simple Interest is:
Maturity Amount = P + (P × r × t)
Where:
- P = Principal Amount
- r = Annual Interest Rate (in decimal form)
- t = Time in years
Substituting the values:
Maturity Amount = 1,00,000 + (1,00,000 × 0.06 × 5)
Maturity Amount = 1,00,000 + 30,000
Maturity Amount = Rs. 1,30,000
2. Compound Interest
The formula for Compound Interest is:
Maturity Amount = P × (1 + r/n)n×t
Where:
- P = Principal Amount
- r = Annual Interest Rate (in decimal form)
- n = Number of compounding periods per year
- t = Time in years
Substituting the values:
Maturity Amount = 1,00,000 × (1 + 0.06)5
Maturity Amount = 1,00,000 × (1.06)5
Maturity Amount ≈ 1,00,000 × 1.338225
Maturity Amount ≈ Rs. 1,33,822.50
Summary
- Simple Interest Maturity Amount: Rs. 1,30,000
- Compound Interest Maturity Amount: Rs. 1,33,822.50
Note*: The maturity amount for your Fixed Deposit (FD) is typically computed using the simple interest formula by the majority of banks. As per the bank rules, interest is often transferred into your current account every quarter or once a year.
How to Use the FD Calculator
- Enter the principal amount.
- Select the interest rate and tenure.
- Click "Calculate" to view maturity amount and interest earned.