 # Fixed Deposit Calculator

### Highlights

• FD calculator, a tool for interest rate and maturity period calculation
• Read and know its features and benefits on FD investment

Fixed Deposit is an effective way to earn attractive returns on cash which was currently not used. Investment in a fixed deposit will make your funds work for your future, by grabbing a good interest rate. That is the reason people invest in fixed deposits for a safe and secure future, as it encourages the user to save for the future plan. It is among the most reliable sources to increase the power of money for the user’s future plans. And, the returns on these deposits are calculated through a FD Calculator.

FD Calculator is an online tool that is designed to assist the user in calculating the return rate of the fixed deposit. The tool makes it easier for you to know the amount of interest you can earn on your deposit principal amount. Also, you can compare the amount of interest earned on different amounts at separate time intervals. It makes it easier for you to choose from the best plan to yield better returns. You can save your time and get the accurate result of your fixed deposit investment with the help of the calculator.

## How a FD Calculator Works?

It is very easy to use a FD Calculator, you just have to insert the values such as the principal amount of deposit, duration and the rate of interest. Then select type of interest like Simple or Compound and choose the frequency. Once these values are inserted in the FD calculator, the result is automatically generated using the formula.

### FD Interest Calculator Formula

The interest on the fixed deposit is calculated using the interest calculator formula mentioned below :

A = P (1 + r/n) nt

I = A – P

Where, A = is the maturity value of the investment with interest

P = the principal investment amount or the initial deposit

r = the annual rate of interest

n = Interest rate compounded every single year

t = Money invested in a fixed deposit for the chosen period

I = Total interest earned

Illustration:

For Example: If a fixed deposit ₹50,000 is booked for 10 years. Then enter the details of your fixed deposit select type of interest and its frequency. The maturity value of the deposit amount would be ₹1,00,484. From which ₹50,484 is the amount you have earned the interest rate.

Fixed Deposit Calculator
Investment Amount (in ₹) - 50,000Tenure - 10 years
Rate of Interest (%) - 7Interest Compounding Frequency - Monthly
Maturity Amount (in ₹) - 1,00,484Total Interest Earned (in ₹) - 50,484

Table Showing Interest Earned And Closing Balance

YearFD Interest Rates (in % p.a.)Opening Balance (in ₹)Interest Earned (in ₹)Closing Balance (in ₹)
17.0050,0003,61553,615
27.0053,6153,87657,491
37.0057,4914,15661,647
47.0061,6474,45666,103
57.0066,1034,77970,882
67.0070,8825,12476,006
77.0076,0065,49481,500
87.0081,5005,89287,392
97.0087,3926,31893,710
107.0093,7106,7741,00,484

## Methods of Interest Calculation

The interest on a fixed deposit is calculated using two methods which are as follows.

Simple Interest – Simple Interest is the interest that is paid in percentage of the principal amount during the investment period. It is the easiest and quickest way to calculate the interest rate. The earned amount calculated using the simple interest will remain the same during fixed deposit maturity.

Compound Interest – Compound Interest is the interest that is calculated as a percentage of the revised amount, which is the original principal plus the accumulated interest of previous periods. In this method the earned interest rate of the previous years is added to the initial principal, thus it increases the principal amount using which the next period interest rate can be calculated. In compound interest, you can receive interest on the principal as well as on the accrued interest during the fixed deposit tenure.

## Difference Between Simple Interest and Compound Interest

BasisSimple InterestCompound Interest
MeaningInterest that is calculated on the principal amount is called as simple interestInterest that is calculated on principal and the accrued interest is called as compound interest
PrincipalThe principal amount remains constant throughout the tenure of depositThe principal amount keeps on changing throughout the tenure of deposit
Growth in interestThe interest yield is same for the entire periodThe interest grows gradually during the tenure.
ReturnsLow in comparision to compound interestHigher than the simple interest
FormulaA = P (1 + rt)A = P (1 + r/n) nt

To know the value of your interest earned on the fixed deposit use either method of interest calculation by using the specific FD Calculator.

## Simple Interest FD Calculator

A simple interest FD Calculator is the FD calculator that uses a simple interest formula. To generate the maturity and the total interest amount of the fixed deposit, you can take its help. The below mentioned formula is used to calculate the amount of interest.

### Simple Interest Formula:

A = P (1 + rt)

Where:

A = Total Amount (Deposit amount + interest rate)

P = Deposit Amount

I = Interest Amount

r = Rate of Interest per year in decimal ratio using r = R/100 formula

R = Rate of Interest per year in percentage (R = r x 100)

t = FD duration for months or year

### How Simple Interest FD Calculator is used?

To calculate the interest on the fixed deposit at simple interest use the simple interest FD Calculator. And put the values in their relevant fields to get the correct result.

Enter these three details of your fixed deposit to compute the total interest which is the

• Investment Amount
• Period of Investment
• Rate of Interest

See the example below to understand the working of simple interest FD Calculator –

An investor booked a fixed deposit of ₹ 10,000 for a period of 10 years at a 7% interest rate p.a. And according to the calculations at the end of FD tenure, his deposit amount will be increased to ₹7,000.

Simple Interest Fixed Deposit Calculator
Investment Amount (in ₹) - 10,000Tenure - 10 years
Rate of Interest (%) - 7
Maturity Amount (in ₹) - 17,000Total Interest Earned (in ₹) - 7,000

Table Showing Interest Earned And Closing Balance

YearFD Interest Rates (in % p.a.)Opening Balance (in ₹)Interest Earned (in ₹)Closing Balance (in ₹)
17.0010,00070010,700
27.0010,70070011,400
37.0011,40070012,100
47.0012,10070012,800
57.0012,80070013,500
67.0013,50070014,200
77.0014,20070014,900
87.0014,90070015,600
97.0015,60070016,300
107.0016,30070017,000

## Compound Interest FD Calculator

The compound interest FD Calculator is devised 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 :

### Compound Interest Formula :

A = P (1 + r/n) nt

Where,

A = is the FD maturity period with the interest rate

P = Principal amount invested or the initial deposit of FD

r = Annual interest rate

n = Time period for which the interest is compounded

t = Investment period for FD

### Calculation of Interest Using Compound Interest FD Calculator

To calculate the interest on fixed deposit at the compounded interest rate use the compound interest calculator. For the compounded interest you need to enter the following details which are as follows.

• Investment Amount
• Tenure
• Interest Rate
• Interest Compounding Frequency

Let’s try out with the help of an example –

Example: A person invests an amount of ₹ 10,000 in the fixed deposit for a period of 10 years. The interest on the deposit is compounded monthly, and to find out the total interest he uses the FD Calculator. The computed maturity value of the deposit is ₹ 20,096.

Fixed Deposit Calculator
Investment Amount (in ₹) - 10,000Tenure - 10 years
Rate of Interest (%) - 7Interest Compounding Frequency – Monthly
Maturity Amount (in ₹) - 20,096Total Interest Earned (in ₹) - 10,096
YearFD Interest Rates (in % p.a.)Opening Balance (in ₹)Interest Earned (in ₹)Closing Balance (in ₹)
17.0010,00072310,723
27.0010,72377511,498
37.0011,49883112,329
47.0012,32989113,220
57.0013,22095614,176
67.0014,1761,02515,201
77.0015,2011,09916,300
87.0016,30070017,478
97.0017,4781,26318,741
107.0018,74170020,096

### Benefits Of FD Calculator

1. Reduces the manual efforts
2. Provides accurate result
3. Fast calculation
4. Time-saving

You can calculate the maturity value of the various banks using their specific FD Calculators and tools such as ICICI FD Calculator, HDFC FD Calculator and many more respectively.

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