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FD Calculator

What is an FD (Fixed Deposit)?

A Fixed Deposit is an investment where you deposit a lump-sum amount with a bank or NBFC for a predetermined period at a fixed interest rate. Unlike a regular savings account, the interest rate is fixed for the tenure of the deposit and typically higher than savings account rates.

How Does a Fixed Deposit Work?

When you create an FD, you choose:

  • Principal: The amount you deposit.
  • Tenure: Duration of the deposit (months/years).
  • Interest Rate: Fixed annual rate offered by the bank for that tenure.
  • Compounding Frequency: How often interest is compounded — annually, half-yearly, quarterly, monthly or daily.

The maturity amount is the principal plus the interest earned. The interest can be paid at maturity or at periodic intervals depending on the FD product you choose.

Compound Interest Formula (Simple)

Most FDs use compound interest. The formula to compute maturity amount is:

A = P × (1 + r/n)^{n×t}

Where:

  • P = Principal
  • r = Annual interest rate (in decimal, e.g. 0.065 for 6.5%)
  • n = Number of compounding periods per year
  • t = Time in years

Planning your savings with fixed deposits? Use this Free FD Calculator to quickly estimate the total interest you’ll earn and the maturity amount for any principal, interest rate, tenure and compounding frequency. Below you’ll find a step-by-step guide, examples, and FAQs to help you make smarter investment decisions.

How the FD Calculator Works

The FD (Fixed Deposit) maturity is calculated using the compound interest formula: A = P \times (1 + r/n)^{n*t} where P is principal, r is annual interest rate (decimal), n is compounding periods per year, and t is time in years. The calculator above applies this formula and returns both the maturity amount and the total interest earned.

Step-by-step

  1. Enter the principal (amount you deposit).
  2. Enter the annual interest rate (for example 6.5).
  3. Enter tenure (in years). You can use decimals for months, for example 1.5 = 1 year 6 months.
  4. Select compounding frequency (monthly, quarterly, etc.).
  5. Click Calculate to see results instantly.

Example

Suppose you deposit ₹100,000 for 3 years at an annual interest rate of 6.5% compounded quarterly. The calculator computes the maturity value and interest earned using the compound interest formula. Use the interactive tool above to see exact figures.

Why use an FD Calculator?

  • Quickly compare different tenures and interest rates.
  • See the effect of compounding frequency (monthly, quarterly, etc.).
  • Plan your investments to meet future goals like education, down payment, or emergency funds.

Tips for Better FD Planning

Diversify durations: spread deposits across short-term and long-term FDs to benefit from laddering strategies. Keep tax implications in mind: interest on FDs is typically taxable. If you need liquidity, consider shorter durations or sweep-in accounts.

Frequently Asked Questions (FAQs)

1. What is the difference between simple and compound interest?

Simple interest is calculated only on the principal. Compound interest calculates interest on principal plus accumulated interest, which leads to higher returns over time.

2. How does compounding frequency affect FD returns?

The more frequent the compounding (monthly vs. annually), the higher the maturity amount — because interest earns interest more often.

3. Is the FD interest taxable?

Yes, in most jurisdictions FD interest is taxable. Check local tax rules; banks may deduct Tax Deducted at Source (TDS) if interest crosses a specified limit.

4. Can I withdraw before maturity?

Premature withdrawal is usually allowed but may attract a penalty and lower interest rate. Always read your bank’s terms before investing.

Conclusion

A Fixed Deposit calculator is a simple but powerful tool for objective planning. Use it to compare options, understand how compounding works, and plan toward financial goals. Try different interest rates, tenures and compounding frequencies in the interactive calculator above to see what suits your needs best.