Fixed Deposit is an effective way to earn attractive returns on money that is currently not is use. Investment in fixed deposit makes your idle funds work for you as the invested amount procure heavy interest and adds on to the initial amount. This is the reason that makes it the most credible form of investment. It encourages one to save for the future. Fixed deposits are one of the most reliable modes of investments that provide the assurance of fixed returns at an attractive rate of interest. Returns on these deposits can be calculated by using the fixed deposit calculator.

Fixed Deposit Calculator is a digital tool designed to assist the people in calculating the maturity value of the fixed deposit. It eases the calculation and let the user know the amount of interest accrued on the principal amount. It can even be used to compare the amount of interest receivable on different amounts at different tenures. It helps the user to select the best plan that can yield more interest within the suitable time duration. The calculator provides accurate result spontaneously. It saves the efforts and time of the user by simplifying the calculation.

It is very easy to use a fixed deposit calculator. The user just has to place the required values such as the amount of deposit, tenure and the rate of interest in the relevant fields and select the type of interest ( simple or compound) and interest payout frequency. Once these values are fed in the calculator, the result is automatically computed using the interest formula.

The interest on the fixed deposit is calculated using the interest calculator formula mentioned below :**A = P (1 + r/n) ^{ nt }**

Where,

**Illustration :**

For Example – A depositor wants to know the maturity value of the fixed deposit booked with ₹ 50,000 for the period of 10 years. He enters the relevant details in the calculator and selects the monthly interest compounding frequency. The computed maturity value of the deposit is Rs. 1,00,484. Out of which Rs. 50,484 is the amount of interest accrued.

Fixed Deposit Calculator | |
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Investment Amount (in ₹) - 50,000 | Tenure - 10 years |

Rate of Interest (%) - 7 | Interest Compounding Frequency - Monthly |

Maturity Amount (in ₹) - 1,00,484 | Total Interest Earned (in ₹) - 50,484 |

**Table Showing Interest Earned And Closing Balance**

Year | Interest Rate (in % p.a.) | Opening Balance (in ₹) | Interest Earned (in ₹) | Closing Balance (in ₹) |
---|---|---|---|---|

1 | 7 | 50,000 | 3,615 | 53,615 |

2 | 7 | 53,615 | 3,876 | 57,491 |

3 | 7 | 57,491 | 4,156 | 61,647 |

4 | 7 | 61,647 | 4,456 | 66,103 |

5 | 7 | 66,103 | 4,779 | 70,882 |

6 | 7 | 70,882 | 5,124 | 76,006 |

7 | 7 | 76,006 | 5,494 | 81,500 |

8 | 7 | 81,500 | 5,892 | 87,392 |

9 | 7 | 87,392 | 6,318 | 93,710 |

10 | 7 | 93,710 | 6,774 | 1,00,484 |

The interest on fixed deposit is calculated using two methods. One is simple interest method where the interest is calculated on the initial amount and the other is compound interest method. In compound interest method, the interest is paid on both the principal amount and the interest earned in the previous interval.

**Simple Interest -** Simple Interest is the interest which is paid as a percentage of the principal, for the whole investment period. It is the easiest and the fastest method to calculate the interest on the deposited amount. The interest amount calculated using simple interest remains the same throughout the tenure of deposit.

**Compound Interest -** Compound Interest is the interest which is computed as a percentage of revised principal, i.e. original principal plus accumulated interest of prior periods. In this method the interest earned in the previous years is added to the initial principal, thus increasing the principal amount, on which the interest for the next period is calculated. In this method, the interest is received on the principal as well as the interest accrued during the term of deposit.

Basis | Simple Interest | Compound Interest |
---|---|---|

Meaning | Interest that is calculated on the principal amount is called as simple interest | Interest that is calculated on principal and the accrued interest is called as compound interest |

Principal | The principal amount remains constant throughout the tenure of deposit | The principal amount keeps on changing throughout the tenure of deposit |

Growth in interest | The interest yield is same for the entire period | The interest grows gradually during the tenure. |

Returns | Low in comparision to compound interest | Higher than the simple interest |

Formula | A = P (1 + rt) | A = P (1 + r/n)^{ nt } |

To know the value of interest earned on fixed deposit using either method of interest calculation use the specific interest calculator.

Simple interest fixed deposit calculator is the calculator that uses the simple interest formula to calculate the maturity value and the interest amount. The following formula is used to calculate the amount of interest:

**A = P (1 + rt) **

Where:

**A**= Total Accrued Amount (principal + interest)**P**= Principal Amount**I**= Interest Amount**r**= Rate of Interest per year in decimal; r = R/100**R**= Rate of Interest per year as a percent; R = r x 100**t**= Time Period involved in months or years

To calculate the interest on the fixed deposit at simple interest use the simple interest fixed deposit calculator. Just put the values in the relevant fields to get the desired result.

Information to be fed in the Simple Interest Fixed Deposit Calculator

- Investment Amount
- Period of Investment
- Rate of Interest

Let's see an example to understand the working of simple interest fixed deposit calculator -

**Example :** An investor books the fixed deposit of ₹ 10,000 for the period of 10 years at the interest rate of 7% p.a. At the end of the tenure, his deposit amount will increase by ₹ 7,000.

Simple Interest Fixed Deposit Calculator | |
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Investment Amount (in ₹) - 10,000 | Tenure - 10 years |

Rate of Interest (%) - 7 | |

Maturity Amount (in ₹) - 17,000 | Total Interest Earned (in ₹) - 7,000 |

**Table Showing Interest Earned And Closing Balance**

Year | Interest Rate (in % p.a.) | Opening Balance (in ₹) | Interest Earned (in ₹) | Closing Balance (in ₹) |
---|---|---|---|---|

1 | 7 | 10,000 | 700 | 10,700 |

2 | 7 | 10,700 | 700 | 11,400 |

3 | 7 | 11,400 | 700 | 12,100 |

4 | 7 | 12,100 | 700 | 12,800 |

5 | 7 | 12,800 | 700 | 13,500 |

6 | 7 | 13,500 | 700 | 14,200 |

7 | 7 | 14,200 | 700 | 14,900 |

8 | 7 | 14,900 | 700 | 15,600 |

9 | 7 | 15,600 | 700 | 16,300 |

10 | 7 | 16,300 | 700 | 17,000 |

The compound interest fixed deposit calculator is deviced to calculate the maturity value and the interest accrued on the fixed deposit using the compound interest formula. The compound interest formula is mentioned below :

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

Where,

To calculate the interest on fixed deposit at the compounded interest rate use the compound interest calculator. The following details are to be entered in the calculator to get the result :

- Investment Amount
- Tenure
- Interest Rate
- Interest Compounding Frequency

Let's try out with an help of example -

**Example :** A person invests an amount of ₹ 10,000 in the fixed deposit for the period of 10 years. The interest on deposit is compounded monthly. To know the maturity value he enters the relevant information in the FD calculator. The computed maturity value of the deposit is ₹ 20,096 .

Fixed Deposit Calculator | |
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Investment Amount (in ₹) - 10,000 | Tenure - 10 years |

Rate of Interest (%) - 7 | Interest Compounding Frequency – Monthly |

Maturity Amount (in ₹) - 20,096 | Total Interest Earned (in ₹) - 10,096 |

Year | Interest Rate (in % p.a.) | Opening Balance (in ₹) | Interest Earned (in ₹) | Closing Balance (in ₹) |
---|---|---|---|---|

1 | 7 | 10,000 | 723 | 10,723 |

2 | 7 | 10,723 | 775 | 11,498 |

3 | 7 | 11,498 | 831 | 12,329 |

4 | 7 | 12,329 | 891 | 13,220 |

5 | 7 | 13,220 | 956 | 14,176 |

6 | 7 | 14,176 | 1,025 | 15,201 |

7 | 7 | 15,201 | 1,099 | 16,300 |

8 | 7 | 16,300 | 700 | 17,478 |

9 | 7 | 17,478 | 1,263 | 18,741 |

10 | 7 | 18,741 | 700 | 20,096 |

- Reduces the manual efforts
- Provides accurate result
- Fast calculation
- Time saving

The maturity value of fixed deposits offered by various banks can be calculated using the bank specific calculator like ICICI FD Calculator, HDFC FD Calculator and many more respectively.