Fixed deposits, or FDs, are a long-term investment vehicle that helps the investor to manage their long-term financial savings. Investors can designate a specific time that the deposit will remain with the financial firm. Since FDs provide higher interest rates than savings accounts, Fixed deposits (FDs) are often a superior option for those seeking to build wealth over the long term.
FD calculators can assist you in determining how much interest you can receive by investing in a fixed deposit for a set period. The maturity amount can be checked using an online FD calculator, considering the compounding interest annually.
Determining the maturity amount of a Fixed Deposit can be complex and time-consuming, but an online FD calculator simplifies the process, allowing individuals to calculate it effortlessly.
There are two types of Fixed Deposits available: simple interest FD and compound interest FD.
Simple interest increases just on the money you deposit or invest (called the principle). With compound interest, you earn depending on the principal plus the interest you've already earned.
Simple Interest Fd:
M = P + (P x r x t/100), where:
Variable | Description |
P (Principal) | Initial amount deposited |
r (Interest Rate) | Annual interest rate |
t (Tenure) | Duration of the investment in years |
For example, if you deposit an amount of Rs. 2,00,000 for 5 years at 10% interest, the equation reads
M = Rs. 2,00,000 + (2,00,000 x 10 x 5/100)
= Rs. 2,50,000
Compound Interest Fd:
M= P + P {(1+i/100) t-1)}, where:
Symbol | Description |
M | Maturity amount |
P | Principal amount |
i | Rate of interest per period |
t | Tenure (duration of investment or loan term) |
For example, if you use the same variables, the compound interest FD will accumulate.
M = Rs. 2,00,000 {(1 + 10/100) 5-1}
Or, Rs. 2,61,051
Follow the procedures described below to use an FD deposit calculator simply.
Using the FD return calculator, you may find out exactly how much you will get when your FD matures.
There are various advantages of using the FD return calculator:
Fixed deposit plans, like other personal tax-saving and investing products, are taxed. If the total interest earned from an FD exceeds Rs. 10,000 in a single fiscal year, a TDS of 10% is deducted. When compared to the SIP plan, it is clear that SIPs are more helpful in the long run. Because long-term equities gains are tax-free, any SIP invested in ELSS (equities Linked Mutual Funds) is likewise tax-free after one year.