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Everything you need to know about FD Interest Rates Calculator

FD calculator is used for calculating interest income and the total amount that the FD holder will receive upon maturity. Here's all you should know about the FD interest rates calculator.

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When you invest in a fixed deposit scheme, you earn interest on the amount deposited, which accumulates over a period of time and enables you to grow your savings. You can determine the exact value of your FD investments by using an FD interest rates calculator, which is a simple and easy to use tool.

The banks and NBFCs (Non-banking Financial Companies) offer an investment instrument which is popularly known as FD or fixed deposit. It is a type of term deposit in which you can invest money for a pre-determined interest rate, which is higher as compared to a savings account.

You can invest money in an FD for a term ranging between 7 days to 10 years at a fixed rate of interest. You can receive interest from the FD as per the applicable terms and conditions. There are primarily two options to receive interest income. You can get the interest credited to your account at regular intervals, or you can get the interest at the time of maturity of your FD scheme. Once you invest money in an FD scheme, you will receive the maturity amount at the end of the FD term. It is crucial to know that once you lock the money for a fixed term, you cannot withdraw the amount before maturity. However, in case you wish to withdraw it, then you will have to pay the penalty.

The several features of the fixed deposit scheme are mentioned below:

  • A fixed deposit enables investors to earn higher interest rates against a savings account. The money can be deposited in an FD account only one time. If you wish to deposit more, you will have to open a new FD account.
  • It is easy to renew a fixed deposit account.
  • As per the Income Tax Act, 1961, the income tax is deducted at source from fixed deposit interest.
  • FD offers better liquidity and higher interest.

There are two types of fixed deposits available, i.e., Cumulative FD and Non-cumulative FD.

Cumulative FD: The cumulative fixed deposit offers compounded interest on a yearly or quarterly basis. The interest is paid at the time of maturity. The cumulative fixed deposits generally offer a higher rate of interest.

Non-cumulative FD: The non-cumulative fixed deposit offers interest on a monthly, quarterly, half-yearly, or yearly basis, as per the investor's choice. Non-cumulative FDs offer a lower rate of interest as compared to cumulative FDs. It is ideal for individuals who want a regular income from their investment.

FD calculator

A fixed deposit is an ideal investment option for all age groups. It offers decent returns with minimal exposure to risk. To receive FD interest on a monthly basis, you can opt for a non-cumulative fixed deposit. Moreover, you must ensure that the interest rates offered are good. Investment experts recommend using an FD calculator to determine interest income as well as maturity amount. FD interest rates calculator is readily available online and can be used to determine FD interest in a matter of a few clicks.

How to use the FD interest rates calculator?

An FD calculator is a tool that is available to calculate the returns offered by various fixed deposit schemes. By entering a few basic details, you can calculate the maturity amount of an FD scheme. It is important to note that the maturity amount varies with the type of deposit, rate of interest, FD term, amount of deposit, and the type of customer.

You can follow the steps mentioned below to use the FD calculator.

  • Type ‘FD calculator online’ for an online search on a search engine.
  • Select the customer type. It is important to note that all different options will offer a different rate of interest.
  • Select the type of fixed deposit.
  • Enter the FD amount you want to invest and select the term of your fixed deposit scheme.

The FD interest rates calculator will display the result as per your input.

Here is the formula for the calculation: A = P (1+r/4/100) ^ (4n) Or, A = P (1 + r/25) 4*n Here, A = amount on the maturity P = Principal amount or amount deposited n = frequency of compounded interest FD calculator helps you to plan your investment without any hassle.

Here's an example:

Suppose you want to invest Rs. 1 lakh in a fixed deposit for a term of three years at an interest rate of 8%. Now, A is your maturity amount = 100000 (1+(8/25) ^ (43) Here, P is the principal amount, n is the term, and r is the interest rate. Hence, A = Rs. 1,27,023 Interest amount = Rs. 1,27,023 – Rs. 1,00,000 = Rs. 27,023

FD calculator helps you to plan and evaluate your returns on the investment beforehand. All you have to do is to enter your investment amount, term, and rate of interest. FD calculator can be of great help to compute your earnings, even before you start investing in fixed deposits.

Factors affecting FD interest rates

The following are the factors affecting the fixed deposit interest rates in India.

  • The higher the amount you invested, higher would be the interest that is paid out.
  • Generally, higher interest rates are offered if the amount is deposited for a longer term. You can earn a higher interest amount if you opt for a cumulative fixed deposit scheme.
  • While you can receive your interest amount on a yearly, half-yearly, quarterly or monthly basis, your income might decrease depending on the frequent of receiving interest income.
  • Senior citizens are offered higher interest rates. The FD calculator comes in handy if you are considering investing your money in any of the fixed deposit schemes. You can calculate the returns of fixed deposits offered by different banks and financial institutions. Based on the result, you can select the fixed deposit scheme, which offers you greater benefits. FD calculator thus helps you to make a wise choice by giving you the leverage to compare the returns offered by different fixed deposit schemes in India.

Recommended Read: Secure Your Retirement with Fixed Deposit