# Fixed Deposit Calculator

Fixed Deposit (FD) is regarded as a traditional instrument of investment as well as one of the safest and trusted ones in India. Offered by several banks and Non Banking Financial Companies (NBFCs), FD allow investors to avail guaranteed and fixed returns. The amount deposited in a FD is secured for a predetermined lock-in period with an option of flexible tenure.

FD calculator is a simple and easy to use online tool that helps investors to compute the maturity amount or the return on investment that the investor can earn on a FD.

%

#### Time period Years

• Total Returns
• Total Investment
Fixed Deposit

Returns (% interest rate)

Excluding tax

Guaranteed Returns Plan

### /yearly *

#### Life Cover

* You will get a total of and life cover by investing just /yearly for years.

## What is an FD calculator?

FD calculator is an online tool that allows investors to calculate the expected returns that they can earn at maturity by investing a particular amount in a FD for a fixed tenure. The FD calculator considers several aspects like tenure and scheme of FD, the principal amount invested, and the rate of interest to calculate the maturity amount at the end of the FD tenure.

Thus, a Fixed Deposit Calculator is a highly recommended tool that an investor can use to determine the earnings on a FD investment beforehand to help make a wise investment decision.

## How does FD calculator help?

It is a complex and prolonged procedure to calculate the maturity amount of a FD investment manually, especially for the layman. However, by using the online FD calculator, one can easily figure out the returns to be received by investing in a FD without any hassle and to save a lot of time.

The investor can compare the interest rates and the maturity amount offered by several banks on FDs to make an informed decision with the help of a FD calculator.

## Formula to determine FD maturity amount

While considering the formula to determine the FD maturity amount, it is important to note that there are two types of interest on FDs that an investor can avail - Simple Interest FD and Compound Interest FD.

Simple interest of FD - formula

SI = P x R x T / 100

SI = Simple Interest, P = Principal Amount, R = Rate of Interest (%) T = Tenure of FD

Let’s take an example here to understand better;
So, if you are depositing INR 1,00,000 for a term of 5 years with a 10% rate of interest;
SI = 1,00,000 + (1,00,000 x 10 x 5/100) = 1,50,000

Compound interest of FD - formula

A = P (1+r/n) ^ (nt)

A = Final Amount
P = Initial Principal Balance
r = Interest Rate
n = Number of Times Interest Applied Per Time Period
t = Number of Time Periods Elapsed

For Example, (using same numbers as above)
A = 1,00,000 {(1 + 10/100) 5-1} = INR 1,61,051

## How is FD interest rate determined

It is important to compare different FD schemes using a fixed deposit interest calculator to obtain the best option with the best rates. Below are some factors that determine the rate of interest of FD:

## Reserve Bank of India (RBI)

All the financial policies in India are managed and implemented by RBI or Reserve Bank of India. RBI executes certain regulations on financial institutions to have maximum control and to track the flow of funds across the country. The interest rates levied on various investment instruments is based on these regulations.

## Impact of recession

Economic slowdown or Recession is the time when RBI lowers the rate of interest in the banks by increasing the money supply in the market. This might result in lowering the interest rate in FDs.

## Inflation

Inflation is another factor that influences the economy of a country. In such case, there is a deflation of rupee, which decreases the purchasing power over the lent amount. Hence, banks impose high interests to collect more cash on deposits to pay for the loss.

## How to use Paybima FD calculator?

Inflation is another factor that influences the economy of a country. In such case, there is a deflation of rupee, which decreases the purchasing power over the lent amount. Hence, banks impose high interests to collect more cash on deposits to pay for the loss.

• The amount you want to invest in the FD scheme
• Tenure of the FD
• Interest rate offered by the bank/financial institution etc.

Once you submit all the details mentioned above, just click on the ‘Calculate’ button to check the maturity amount that you can earn.

## Benefits of using FD calculator

A fixed deposit calculator offer many advantages to the user such as;

• It saves time and give the result within seconds
• The tool is available online for free, unlimited use and allow accurate and error-free result
• The FD calculator help investors to plan finances better
• The investor can evaluate the exact returns received on an investment at maturity with minimal effort
• The investor can compare the maturity amount offered by different financial institutions with ease

However, you may note that the FD calculator cannot compute the amount of tax that you may have to pay on your FD returns.

## Factors to consider while using FD interest calculator

There are certain factors to be considered for calculating the rate of interest on FDs by using FD calculators as mentioned below:

• Amount deposited - The first and the most basic thing to consider while using a FD calculator is the deposit amount. This is the sum of money that you invest on a FD scheme. The best part of FD investment is that you can invest with a minimum sum of INR 1000.
• Rate of interest - The FD interest rate might vary depending on the bank you are opening the FD account as well as the tenure of the fixed deposit. Similarly, the rate of interest offered by different financial institutes also varies.
• Tenure of FD - The FD rate of interest also depends on the tenure chosen for investing the money. The minimum investment tenure on FD is from 7 to 10 years.
• Frequency of compound interest - This factor is taken into consideration to calculate the maturity amount that can be earned on your FD at maturity on a monthly, quarterly, semi-annual or annual basis.

FD interest rate can be calculated in two ways by using formula as below:
Simple Interest FD
SI = P X R X T / 100
Compound Interest FD
M = P (1+r / n) ^ (n * t)
However, the best option is to use a FD calculator to compute the maturity value of your FD easily.
Yes, monthly interest on FD is available. You can earn varying monthly pay on your FD depending on the amount invested.
As per the Income Tax Act, 1961, interest earned at maturity of an FD is considered as income earned from other sources. Thus, the FD interest amount is fully taxable.
You can get a tax deduction under Section 80C of up to Rs. 1.5 lakh when you make an investment on a tax-saver FD scheme with a minimum lock-in period of five years.
In case your total income in a financial year is not more than ₹2,50,000, which is the minimum taxable amount, you will be exempted from tax implications. There will be no TDS deduction on FD interest.
You can break your FD before the lock-in period. However, if you withdraw FD before the tenure, you will lose money due to the penalty charged by the bank. Almost 1% of the deposit amount can be charged as penalty on premature FD withdrawal.
As per the change in rule by RBI for Fixed Deposit (FD), if the investor does not claim the amount after completion of maturity, he/she will receive less interest on it. In fact, the interest you get will be equal to the interest you get on the savings account.
Below are some banks that allow better interest rate on FDs:
Axis Bank
HDFC Bank
Canara Bank
Punjab National Bank
IDBI Bank
Punjab and Sind Bank
State Bank Of India etc.