The amount you invest in these deposits is secured for a defined duration, ranging from 7 days to 10 years. The interest rate and the total amount accrued at maturity can be calculated using the FD calculator monthly interest.
Calculation Method For Fixed Deposit Maturity Amount
The interest on FD rates can be calculated using simple or compound interest. Let’s examine both of them.
Simple Interest Calculation
The following formula is used to compute simple interest (SI):
SI = (P * R * T) / 100
- Simple Interest is abbreviated as SI.
- The capital letter P represents the principal sum (your investment).
- R is the interest rate (in percentage terms).
- T stands for the FD’s tenure or length of time.
The simple interest you will receive at maturity, for instance, if you invest Rs 15,000 for five years at a 10% annual interest rate, is SI = (Rs 15,000 * 10 * 5) / 100 = Rs 7,500.
The total maturity sum would be Rs 22,500 (Rs 15,000 for the principal plus Rs 7,500 for simple interest).
Compound Interest Calculation
Compound interest (CI) can be computed using the formula:
- A = P * (1 + (r/n))^(n*t)
- Maturity is represented by the letter A.
- P represents the principal amount.
- r is the interest rate (in decimal form).
- The number n represents the number of times interest is compounded yearly.
For instance, if you invest Rs 10,000 for three years at a 10% interest rate compounded quarterly, the calculation goes like this:
A = Rs 10,000 * (1 + (0.10/4))^(4*3)
A = Rs 10,000 * (1 + 0.025)^12
A = Rs 13,449 (approximately)
The compound interest received over three years is, thus, 13,449 – 10,000 = 3,449. You can use an FD interest calculator to calculate your eventual maturity amount and the compound interest rates.
Banks and Non-Banking Finance Companies (NBFCs) provide Fixed Deposits (FDs) as a term investment. Subject to certain limits and limitations, these deposits often offer a greater interest rate.
Benefits Of The Fixed Deposit Calculator From ET Money
Using the FD calculator provided by ET Money has many benefits. Some of the most common ones include:
- Calculations are made easier with the ET Money FD calculator, which eliminates the need for intricate monthly interest computations.
- This calculator gives you immediate results, helping you save time.
- This no-cost online FD calculator’s accuracy guarantees error-free results.
- Its accuracy enables you to manage your spending effectively.
- It is important to remember that this FD calculator has its limitations and cannot be appropriate in all situations, just like any other FD calculator.
- After the maturity period, you can accurately assess your entitlement and make plans accordingly.
These calculators are both freely and unrestrictedly usable for registered users. The maturity amounts of various financial institutions can easily be compared.
Using the FD calculator, you can quickly plan your finances. You are free to use our services as frequently as you like.
Benefits Of Using An FD Calculator
Utilizing an FD calculator offers depositors several advantages, including:
- Simple To Use: An online FD calculator to determine your matured FD amount is easy. Just type in some basic info like your initial deposit, how long you will keep it, and how often interest is added (every few months or once a year).
- Know The Maturity Amount: Potential investors should calculate the expected maturity amount before putting money into an FD. This helps ensure that the FD meets its financial goals when it matures.
- Calculation Accuracy: By using an online FD calculator monthly interest to calculate interest and maturity amounts, depositors can avoid difficult calculations and mitigate the chance of making mistakes.
- For FD Selection, Compare The Following: Banks and other financial organisations charge various rates for fixed-term investments. You can use an FD calculator to determine which FD is ideal for you. Consider the FD’s term, interest rate, payout frequency, and compounding schedule (e.g., every three, six, or twelve months).
You may quickly compare the amount of money you will receive when your FD matures and the interest you will earn with this calculator. This aids in your decision-making over the best FD plan for you.
How Can You Benefit From An FD Calculator?
You can use an FD rates calculator to estimate the value of your investment in the future, which is beneficial in many ways. It includes:
- It enables you to assess your prospective returns from FD investments.
- You can compare different FDs depending on interest rates and tenures, thanks to it.
- If you are a senior citizen and wish to know the return provided to senior persons, this calculator can also be useful.
- To reach your financial objectives, you can efficiently plan your finances.
How Is The Interest Earned On Fixed Deposits Determined?
The tenure of the FD and the applicable interest rate when the account is opened, determines the receivable interest on your investment.
- Cumulative FD: After being calculated for the quarter, interest is compounded/reinvested to the principal amount. The interest rate for the following quarter is calculated using the cumulative sum.
- Traditional FD With Quarterly Interest Payout Option: At the end of each quarter, simple interest is calculated and paid out.
- Traditional FD With Monthly Interest Payment Option: Interest is discounted at the end of each month.
Simple interest is used to compute interest for short-term financial instruments.
How Should The Fixed Deposit Calculator Be Used?
The FD Calculator can be used to determine the monthly interest and maturity amount in ways listed below:
- Go to the lender’s website.
- Go to the FD Calculator page.
- Now enter the investment amount, tenure, and the interest rate. Click ‘submit’, and the screen instantly displays your returns.
Wrapping Up
You can use an FD calculator to determine the receivable interest by investing in an FD for a set period. The following details are all necessary to compute monthly interest via the FD calculator. The online FD calculator calculates the maturity amount using compound interest calculated monthly, quarterly, half-yearly, or annually.