 # Fixed Deposit Calculator

A fixed deposit (FD) is a  short or long-term investment offered by a number of banks and non-bank financial companies (NBFCs). When you put money into a fixed deposit account, the amount you put in earns interest on the current FD rate. This interest rate continues to compound over time, allowing your money to grow. # ?

#### What is a fixed deposit calculator?

It is an easy-to-use tool. An online FD calculator may be used to calculate the interest and the amount that will accumulate at maturity. Accordingly, you can determine your FD investment amount. An FD can be locked for a minimum of 7 days to 10 years.

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#### Why should you use an FD calculator?

Calculating the maturity of FDs is a complicated process with many variables. The FD calculator performs all of the work for you:

1. It offers accurate figures at the touch of a button.
2. It saves time while performing difficult calculations.
3. You can use a fixed deposit return calculator to compare the maturity amounts and interest rates of different financial institutions’ FDs.

When you have all of the numbers in front of you, you can make an informed decision.

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#### How is Fixed Deposit Interest Calculated?

Simple Interest and Compound Interest are the two most used methods for calculating the interest rate on a fixed deposit.

Simple Interest:

The fixed deposit calculator uses the following formula-

M = P + (P x r x t/100), where –

1. P – principal amount that you invest
2. r – rate of interest per annum
3. t – tenure in years

For example, if you invest Rs.1 lakh for 5 years at an interest rate of 10% p.a., then your interest amount at the time of maturity will be:

M = P + (P x r x t/100)

M = 1, 00,000 x (10 x 5/100) = 50,000

The money you will receive after 5 years will be Rs.1.5 lakh.

Compound Interest:

For compound interest, the FD return calculator uses the following formula–

M = P (1 + r/n)nt

1. P – principal amount
2. r – rate of interest per annum (in decimals)
3. n – number of times interest applied per time period
4. t – tenure in year

For example, if you deposit an amount of Rs.10,000 for a tenure of 10 years at a quarterly compounding interest rate of 7%, then your interest amount at the time of maturity with a compound interest calculation will be the following:

1. M = 10,000 (1 + 0.1/4) 4 x 3
2. M = 10,000 (1 + 0.025) 12
3. M = Rs. 13,449 (approximately)
4. Compound Interest (CI) = Maturity Amount – Principal Amount
5. CI = 13,449 – 10,000 = Rs. 3,449

The money you will receive after 3 years will be Rs. 13,449.

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#### FAQs

Here are few advantages of using an FD calculator–

» An FD calculator is an efficient tool that saves time and reduces the chances of human error.

» You can get an accurate estimate of the money you will receive when your FD matures.

» Get the exact amount you’re eligible for at the end of your maturity period so that you can plan your future.

Interest rates on FDs are controlled by a number of factors, including:

» The deposit’s period

» The customer’s age

» Current market conditions

Yes, senior citizens benefit from higher interest rates on their fixed deposits.

The minimum period to invest in a fixed deposit is 7 days and the maximum is 10 years.

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