Fixed Deposits are a preferred choice for investors who favour stability. Those looking to invest in FDs can seamlessly manage their finances by utilizing the FD Calculator. This user-friendly online tool helps calculate the returns on FD investments by considering the investment sum, interest rate, and duration.
How Can FD Calculator Help you?
Determining the maturity amount for a fixed deposit (FD) can often be complex and time-intensive. However, with an online FD calculator, you can compute these amounts effortlessly.
- The process of calculating FD maturity involves various factors and can be intricate. A fixed deposit calculator simplifies this by providing precise calculations instantly with just a click.
- This tool significantly reduces the time spent on these elaborate calculations.
- An FD return calculator also allows you to compare the maturity sums and interest rates provided by different banks or financial entities. Having access to this detailed information helps you make well-informed financial decisions.
How Does FD Calculator Work?
To use an FD (Fixed Deposit) Calculator, you simply need to enter three key details: the deposit amount, the investment duration (in months or years), and the applicable interest rate, along with selecting the compounding frequency—monthly, half-yearly, or annually. Once these inputs are provided, the calculator uses the compound interest formula to determine the maturity amount. This amount includes both your principal investment and the total interest earned over the selected tenure, giving you a clear picture of your returns.
How To Calculate Fixed Deposit Maturity Amount
Interest on FD is compounded quarterly, in most banks. The formula used by the Cleartax FD calculator is:
A = P * (1+ r/n) ^ n*t ,
Where ,
- I = A – P
- A = Maturity value
- P = Principal amount
- r = rate of interest
- t = Number of years
- n = Compounded interest frequency
- I = Interest earned amount
Example Of FD Calculation
Let’s say you invest Rs. 2,00,000 in an Indian Bank FD at 6.5% per annum for 2 years.
Using the simple interest formula:
Maturity Amount = Principal + (Principal * Rate * Tenor)
= 2,00,000 + (2,00,000 * 0.065 * 2)
= 2,00,000 + 27,527
= Rs. 2,27,527
So, the maturity amount on your Rs. 2 lakh Indian Bank FD after 2 years at 6.5% interest will be Rs. 2,27,527.
