FD Calculator
What is a FD calculator?
Fixed deposit is a financial instrument offered by banks and financial institutions in India. It is considered as one of the safest investment options that offer high returns with flexible tenure options.
How to use it
The maturity value of the deposit will depend on the amount of investment, duration of the deposit, interest rate, and on the frequency of interest pay-out which can be monthly or quarterly, or a cumulative deposit.
You will have to enter the date of opening of the FD, and then enter the amount of deposit which has to between Rs 500 and Rs 10 lakh.
Thereafter, choose the frequency of the interest pay-out. For monthly and quarterly pay-outs, reinvestment, the duration has to be entered in days, months or years. The short term duration can be between 1-31 days.
Lastly, enter the annual rate of interest at which the fixed deposit investment has been made.
One can use the slider to put in different fixed deposit amounts to arrive at the final maturity value.
Why should you use FD calculator?
Just like any other financial decision, investing in an FD also entails ticking one’s budget and make it work in unison with the individual’s financial goals.
Fixed deposit is all about minimizing risks and guaranteed returns. If you invest in the market (like equity mutual funds), there remains a considerable risk.
Your FD investment can help absorb losses, if any, to a certain limit. For this, you should know how much to put into your FD account. And this can be easily estimated using the FD Calculator by Paisabazaar.
Fixed deposit calculator also helps in comparing the various types of FD schemes offered by banks and other financial companies. One can comprehend which scheme provides the best returns at the desired tenure.
How do we use the Fixed Deposit (FD) Calculator?
The FD calculator on the IDFC First Bank’s website is easy to use. All you have to do is to:
Select the customer, whether it is regular or senior citizen From the dropdown box, select the type of deposit i.e. cumulative or non-cumulative type Use the slider to choose or type in the deposit amount Choose the tenor The amount earned at maturity is automatically shown.
How to calculate Fixed Deposit (FD) maturity amount.
You don’t have to use any mathematical formula for it; instead, you can visit the IDFC First Bank website and use the fixed deposit calculator by providing the inputs such as the type of FD, deposit amount and tenure, whether it is for a short-term or long-term (over 180 days).
The annual interest rate is updated automatically. The maturity amount will be shown once you have filled in the details properly.
What is Fixed Deposit?
Fixed Deposit, a type of Term Deposit is popular quite a popular investment choice in India due to high interest rate (as compared to regular savings account) and low risk. The interest rate is fixed for the whole maturity period and, it’s usually considered as an extremely safe investment.
The interest rates differ from bank to bank and the interest earned can be calculated Cumulative, Quarterly, Monthly and Standard.
Benefits of FD
- Comparatively safe investment
- Stable and predicted returns (example 8% per annum)
- Well suitable for conservative investors like senior citizens
Limitations of FD
- Low liquidity
- Low returns because effective returns are lower considering taxes and inflation
- Not suitable for long term wealth creation or the investors with high risk appetite like young investors in their 20s or 30s
How is FD Interest Calculated?
There are two methods of calculation of interest on a fixed deposit, viz. Simple Interest and Compound Interest.
What is Simple Interest?
Simple interest is the interest earned on an investment at a pre-decided rate of interest for a specific period of time. It is calculated by multiplying the principal amount, the rate of interest per annum and the time for which the money is lent in years.
Simple Interest Formula:
SI = P x R x T/ 100
Where,
SI = Simple Interest
P = Principal (amount invested)
R = Rate of Interest (in %)
T = Tenure (time for which deposit is kept in FD account)
For example, if a sum of Rs 10,000 is invested for 3 years at 10% interest rate per annum, then at the time of maturity,
SI = 10,000103/100 = Rs 3,000
**Maturity Amount **= Rs 13,000
What is Compound Interest?
Compound interest is the interest earned on principal as well as interests. It is calculated by multiplying the principal amount with the interest rate raised to the number of periods in years for which the interest will be compounded.
Formula for Compound Interest:
A = P (1+r/n) ^ (n * t)
Where,
A = Maturity Amount
P = Principal amount
r = Rate of Interest (in decimals)
n = number of compounding in a year
t = number of years
For example, if a sum of Rs 10,000 is invested for 3 years at 10% compound interest rate (quarterly compounding), then at the time of maturity,
A= 10,000 {1 + (0.1/4)} ^ (4 * 3)
A = 10,000 (1 + 0.025) ^ (12)
A = 10,000 (1.025) ^ (12) = Rs. 13,449 (approximately)
Compound Interest (CI) Earned over 3 years = Maturity Amount – Principal Amount
CI = 13,449 – 10,000 = Rs. 3,449
Benefits and Features of FD Calculator
The calculator is easy to use by filling in the FD amount and tenure in years or days.
You can find the exact amount of interest you will be eligible for at the end of the term. This helps you plan your expenses accordingly.
With the FD calculator monthly interest, you can compare the interest and FD amounts at - - - maturity of other financial institutions.
The FD calculator online is free to use.
The key features of the calculator are:
It can be used by anyone who has basic knowledge of a computer.
It gives results within a few seconds.
The slider allows you to have the inputs easily.