If you’re thinking of investing your savings in a fixed deposit, then you must use an FD calculator beforehand. What this fixed deposit calculator will do is help you in estimating the time period you need to keep your money invested in order to get your desired maturity amount, as per the FD rates. Let’s know what is a fixed deposit calculator and how to use it to your advantage.
What is a Fixed Deposit Calculator?
An FD calculator or fixed deposit calculator is an online tool that helps calculate the total amount you will receive after the FD tenure when you invest in a fixed deposit. You can compare the maturity amount based on different time periods and FD interest rates and find the best FD scheme for you, using a fixed deposit calculator.
How to Use a Fixed Deposit Calculator?
Using an FD calculator is a simple task. All you need to know are the current FD rates provided by the top banks in India and the rest of the job is taken care of by the fixed deposit calculator.
Steps to use a fixed deposit interest calculator:
- Open an FD calculator
- Enter the amount you wish to invest
- Now choose the fixed deposit interest
- Put in the time period for which you wish to stay invested
- Hit the Calculate button
The tool will calculate the interest you will get based on the rate of interest provided by you along with the maturity amount you will receive. This amount may change, if you choose close your FD prematurely.
What is Fixed Deposit Interest Calculator?
A fixed deposit interest calculator is similar to a fixed deposit calculator with just one difference. While an FD calculator helps you estimate the maturity amount you will receive at the end of your FD tenure, a fixed deposit interest calculator will calculate the interest you will earn on your FD investment. While the maturity amount includes the interest, if you wish to know only the interest on your FD, you may use the FD interest calculator instead of an FD calculator.
What is Fixed Deposit Interest Calculation Formula?
- The formula for Simple Interest calculation:
“P x R x T/ 100 = SI”
SI stand for Simple Interest
P is the Principal amount (The investment amount)
R is the Rate of Interest in percentage (%)
T is the tenure, i.e., the time for which the deposit is kept in a Fixed Deposit account.
- The formula for calculation of Compound Interest:
“P (1+r/n) ^ (n * t) = A”
In this formula,
A is the Maturity Amount
P is the Principal amount
r represents the Rate of Interest
n is the number of compounding in a year
t is the number of years
Benefits of Using a Fixed Deposit Calculator
Using an FD calculator is not a mandatory condition before investing in a fixed deposit but doing so helps in choosing the best FD schemes and tenure so as to get the maximum advantage.
The following are the benefits of using a fixed deposit calculator:
- Zero scopes of errors – An FD calculator is an automated tool which generating automated results based on the inputs, thus eliminating human errors
- FD calculator helps zero-in on inconvenient & cumbersome calculations, thus proving to be time-saving
- Helps compare various FD schemes by generating results for different FD interest rates and time periods
Factors Affecting Fixed Deposit Interest Rates
The following are the most important factors that affect FD interest rates:
- Period or tenure of the deposit
Tenure of the deposit is the time period for which the principal amount remains invested in a fixed deposit. This period varies and most commonly ranges from a week to a decade. Different terms fetch different interest rates on fixed deposits.
- Age of an applicant
Fixed deposits offer a preferential rate of interest to senior citizens and may range anywhere from 0.25 per cent to 0.75 per cent over the regular interest rate for consumers. The age limit can vary starting from 60 years and above and sometimes 55 years and above in the category of senior citizens.
Some banks and/or financial institutions offer special FD rates for super senior citizens, i.e. those who are of 80 years of age or more.
Fixed Deposit Calculator: FAQs
A fixed deposit calculator helps calculate the maturity amount for a deposit based on the prevailing interest rate for a certain period of time.
The details required to use a fixed deposit rate calculator include the deposit amount, the tenure of deposit, and the prevailing fixed deposit interest rates calculator.
Yes. FD calculators are online tools which are mostly freely accessible.
Yes. The interest rate earned on a fixed deposit is taxable. But, you can claim income tax deductions of up to Rs 1.5 lakhs (u/s 80C) on the amount invested in an FD.
Yes, it is mandatory to provide a PAN card when applying for a Fixed Deposit scheme. If you do not have a PAN, you will be charged with 20% TDS instead of a usual 10% for Indian residents.