A fixed deposit calculator helps you to calculate the rate of interest you can earn on your Fixed Deposit for a fixed tenure. This calculator is available online. You have to provide some necessary information to calculate FD interests. It is used to determine the maturity amount by applying the rate of interest.
How can you use FD interest Calculator?
The use of an FD Calculator is effortless and straightforward. You have to follow some steps and provide some necessary relevant information, and you will get your answer. Some of the details which you have to offer are:
- Customer type: You have to choose your customer type, stating whether you are:
- New Customer
- Existing Loan Customer
- Senior Citizen
- Type of fixed deposit: You have to mention the kind of fixed deposit (FD) you want to avail out of the two options available
- Cumulative
- Non-cumulative
- The amount you want to deposit: You will have to mention the sum you wish to invest in a fixed deposit.
- Preferred tenor: This is the period for which you want to invest your money in the fixed deposit
Once you provide this information, you will automatically see the interest amount and the total amount you will earn at maturity. You can calculate both simple and compound interest on the FD amount. It can calculate the monthly interest on your fixed deposit account. It will help you in selecting the bank or NBFC, which offers you the best FD rates.
How does the FD calculator work?
The use of the calculator depends upon the maturity amount of your FD over a certain period at a certain interest rate. The formula for annual compounding is:
A = P (1+R/100) ^N
Where,
A = the maturity amount in Rs.
P = the principal amount in Rs.
N = the total period in years,
R = the interest rate percentage
The final maturity amount will depend upon final compounding, which can be monthly, quarterly, half-yearly, or annual. Accordingly, there will be a modification in the formula used by the calculator. For example,
If the compounding is quarterly, then A= P (1+(R/4)/100) ^4N
If it is monthly, then A= P (1+(R/12)/100) ^12N
Types of FD calculators:
Every bank or NBFC offering a fixed deposit has its calculator. The basic functioning of these calculators is the same, but they differ in some details, like rate of interest, mode of pay-out, and FD tenure. You can select the bank or NBFC after calculating and comparing the returns you are likely to get with each.
Online calculators also help in deciding the tenure of your deposit. You can go on providing different details and can see the outcome in the form of varying maturity values. The one that is most profitable to you can be adopted.
There is a cut-throat completion among the financial service providers, and they attract customers by offering attractive interest rates. Online FD calculators help you in picking up the best bargain for your deposits.
