What is the use of Fixed Deposit Calculator?

Fixed Deposit is a type of investment tool offered by many banks and financial institutions. Such deposit is usually offered with a higher interest rate and flexible tenure. The interest rate given on these deposits remains the same throughout the period despite the market fluctuations. Few banks allow you to withdraw the accumulated amount before the maturity period but a certain penalty fee will have to be paid in return. To determine the interest and maturity amount, you can use the FD calculator available online on any bank or NBFC website. It is a simple tool to figure out your interest payouts and the amount you are eligible for at the end. 

How to Calculate Fixed Deposit Interest?

Fixed Deposit is a reliable investment tool to preserve and grow existing savings. The interest rate offered by the bank depends upon the tenure of the fixed deposit and the frequency of the interest payments. 

Two types of formulas help to calculate interest – simple interest and compound interest. The formulas are given below: 

Simple interest = P + (P x r x t/100)

where, 

P = Principal amount deposited by you

r = rate of interest per annum

t = tenure of fixed deposit (in years) 

Let’s take an example where the principal amount is Rs 100000 at a 10% interest rate for 5 years. 

M = Rs. 100000 + (100000 x 10 x 5/100) 

    = Rs. 150000

Compound interest = P + P{ (1+i/100) t – 1} 

where, 

P = Principal amount 

i = Rate of interest per annum

t = Fixed deposit tenure 

For example, when the principal amount is Rs. 100000 for 5 years at a 10% rate of interest, 

M = Rs. 100000{(1 + 10/100) 5 -1} 

    = Rs. 161051 

The interest payout on Fixed deposit maturity entirely depends on the interest rate decided by the banks and the frequency of payouts. You can use the FD calculator to find out both types of interests. 

Also Read: What is programming, and how would we use it these days

How to use Fixed Deposit Calculator? 

Using a fixed deposit calculator is pretty simple. All you have to do is enter the fixed deposit amount and tenure of the fixed deposit to calculate the maturity interest. This calculator helps you calculate both cumulative and non-cumulative payouts. 

To calculate the fixed deposit interest, follow the below steps: 

• Enter the fixed deposit amount and tenure. 
• If you get the option to fill the type of fixed deposit you have invested in, enter details about that as well. 
• Click on proceed, and the result on the screen will show the interest amount and maturity amount. 

The reflected result will help you save the manual work of calculating the interest along with the maturity amount. You can easily determine the return on your investment with the figures provided. 

What is the use of the Fixed Deposit calculator?

With a fixed deposit calculator, you can figure out the interest without breaking a sweat. Let’s find out the different ways in which the calculator can help you. 

• Fixed deposit interest calculator involves complex multiple variable calculations. Moreover, the fixed deposit calculator will do all the hard work and provide you with accurate results with just a click. 
• Complex calculations take up a lot of your time; therefore FD calculator saves you the time and effort of interest calculation. 
• Fixed deposit calculator assists you in comparing the maturity amount and FD interests rates offered by various banking institutions. You can make a careful and informed investment decision based on the figures provided by the calculator. 
• Financial planning is a must these days to keep track of daily expenses. Thus, using a fixed deposit calculator enables you to do plan your finances according to your future needs. 

Advantages of Fixed Deposit Calculator 

Fixed deposit calculator offers several advantages to all users. The benefits are:

• Firstly, you get accurate and exact maturity amount results with the help of this calculator. 
• Secondly, another interesting advantage is that the user doesn’t need to pay for using the calculator. It is completely free for unlimited use, even for unregistered users. 
• Last, you get an opportunity to easily compare the maturity amount of different financial institutions with just a few clicks. 

In Conclusion

Calculating interest and amount on a calculator is easy once you understand the basic steps. You should not use the calculator on any online site because each bank calculates differently. Thus, choose a calculator that follows the method used by your bank.