What is a FD Calculator?
A fixed deposit (FD) is a type of term investment offered by banks and NBFCs. These deposits typically offer a higher rate of interest, subject to certain terms and conditions. The amount you deposit in an FD is locked for a predetermined period which can vary between 7 days and 10 years.
The interest rate for FDs is fixed at the time of opening the deposit and independent of any fluctuations in the market. Some financial institutions even allow one to break their FDs prematurely by paying a certain penalty fee. An FD calculator can be used online to determine the interest and the amount that it will accrue at the time of maturity.
How to use FD calculator?
Here are a few easy steps to guide you using the FD calculator:
- Ensure you have all the related data available to you.
- Enter the variables as mentioned in the formula on their designated slots.
- The FD maturity amount will be displayed instantly.
Advantages of using online FD calculator
Know the exact amount you will receive at the time of FD maturity using the FD amount calculator.
There are several other advantages of using these calculators:
- Get the exact amount you are eligible for at the end of your maturity period and plan your future accordingly.
- Compare the maturity amount of different financial institutions easily.
- Besides the Fixed deposit calculator, you can easily plan your finances using the following calculators All of our offerings are free to use and you can use them as frequently as you want.
How is the return on a fixed deposit calculated?
A fixed deposit (FD) is a secure way to save and expand your money. the rate of interest on your deposit is calculated by the tenure you choose, as well as the frequency at which the interest is charged.
The FD method for calculating interest is:
a = p*(1+ r/n)^n*t where,
a is the maturity amount,
p is the principal amount,
r is the rate of interest,
t is the number of years,
n is compounded interest frequency.
For example, Ashish has invested ₹20,000 for 10 years at a 6% interest rate, then at the time of maturity.
Then the maturity value after 10 years will be ₹ 35,817
How to calculate the fixed deposit maturity amount?
The following steps should be taken to measure the maturity level of a fixed deposit using the FD interest rate calculator:
- The customer must choose between two customer types: normal or senior citizens.
- Choose either a cumulative or interest payout (quarterly/monthly) or short-term fixed deposit.
- Enter the FD amount.
- Choose the FD's required tenure, either in years/months/days or in days only.
- The customer is shown the relevant interest rate, interest level, maturity date, and maturity amount.
The benefits of using Dhan FD calculator
A fixed deposit interest calculator, also known as an FD calculator, instantly calculates the balance you will earn when the FD matures for your deposit amount, after taking into account the appropriate rate of interest with your selected FD scheme and tenure.
The Dhan's FD Calculator is simple to use and completely free:
- FD can be used as collateral for taking loans. You can take up to 80-90% loans on your FD amount.
- The depositor can choose to transfer the amount at the time of maturity for a further Fixed Deposit.
- The money can be deposited only once. Once deposited, withdrawal of money from the account will accrue a penalty.
- FD schemes are good investment tools for those who have surplus funds and want to earn money from it.
Tax Benefits on FD
Similar to other personal tax-saving and investment instruments, Fixed Deposits schemes also attract taxes. A TDS of 10% is deducted on the returns accrued from an FD if the total interest exceeds Rs. 10,000 in a single financial year. Let's compare this to the SIP scheme and you can see that SIPs are more beneficial in the long term. Since long-term gains from equity are tax-free, any SIP which invests in ELSS (Equity Linked Mutual Funds) is also tax-free after one year.
Although, FD has been one of the most preferred way of saving money since a long time, young investor are choosing stock markets over the traditional way of saving to outperform inflation. Here is a basic comparison for FD vs Stocks, which is a better investment option.