Fixed Deposit Calculator

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Fixed Deposit

Monthly Deposit Amount: ` 2,00,000
Rate of Interest: 8 %
Tenure: 24 months
Maturity Amount: `

What is a Fixed Deposit?

Fixed Deposit (FD) is a type of term deposit offered by Banks and other financial institutions. Fixed Deposits offer higher interest rates than savings accounts but on certain terms and conditions. For instance, the invested amount should be locked for a fixed tenure ranging between 7 days and 10 years at a fixed rate of interest. Interest earned on FD is either paid out at regular intervals or is reinvested, depending on the investor’s choice. The maturity amount of the fixed deposit is paid out at the end of the tenure.

Fixed Deposit Tenure

Fixed Deposit has a time period or tenure for which the sum invested gets fixed or locked. You can avail an FD for a tenure of anywhere between 7 days and 10 years. Different financial institutions offer different tenure options. However, it is best if you compare fixed deposits offered by different financial institutions and then make a choice. What is of note here is that the tenure you choose will also decide the interest rate the bank will offer you. The longer the tenure higher the FD interest rate.

Fixed Deposit Interest Rate

Interest rate on FD is higher as compared to savings accounts and depends upon the Fixed Deposit amount and tenure. Interest rate on Fixed Deposit varies from one bank to another hence, compare fixed deposit rates of different Banks to make a smart choice. The interest payout or compounding frequencies vary between FD schemes, is usually done on a quarterly, half-yearly or annually basis. However, keep in mind that the interest rate for tax-saving FDs is decided at the start of every financial year by the government and is same across banks.

Investment amount

Investment in a Fixed Deposit is made only once and the minimum amount for opening an FD varies in case of different financial institutions. You can start with as low as Rs 5000 and invest even up to Rs 10 crores or more.

Benefits of investing in a Fixed Deposit

  1. Assured returns: FD is a secure investment and yields assured returns for your investment.
     
  1. Inculcates saving habit: The investment made in an FD is locked for a fixed time-period and helps develop a habit of saving.
     
  1. Better returns than savings accounts: It yields better returns as compared to a savings account as the interest rate is higher. In a savings account, you can earn interest at up to 6%, whereas in an FD, interest rates start from 7%.
     
  1. Early withdrawal: You can withdraw the money invested in a Fixed Deposit even before the maturity date by paying a penalty charge.
     
  1. Interest payment available at different intervals: Interest can be paid out at maturity, annually or monthly depending on the term you choose.
     
  1. Flexible tenure options: You can enjoy the benefit of flexible tenure options and fix your money as long as you want to. You can invest your money for a time period ranging from 1 week to 10 years.
     

Fixed Deposit (FD) vs. Recurring Deposit (RD)

Both FD and RD are term deposits which earn interest at the same rate for the entire tenure of the deposit. At maturity, the invested amount is paid out along with the accrued interest.

However, FD of same amount and same tenure as that of RD fetches more returns. The reason being, in case of FD you make a lump sum investment and so the entire money earns interest for one year. Whereas, in RD the first installment earns interest for 12 months, the second for 11 months, third for 10 months and so on.

Fixed Deposit is a smart choice to make when you have a lump sum amount to invest but if you can allocate only a certain amount from your income every month towards investment, then recurring deposit is a better choice to make.

Factors That Can Affect Fixed Deposit interest rate

While Fixed Deposits have fixed rate of interest throughout their tenure, the interest rate can change at maturity and the FD renewal or reinvestment is always done at the interest rate at maturity. The interest rate may increase or decrease with time depending on bank norms. Therefore, it is best to compare the fixed deposits and re-invest in the scheme which offers higher interest.

The following are some of the certain factors that can affect interest rates of FD:

  • Reserve Bank of India (RBI) - Reserve Bank of India is the Central Bank of the country bestowed with the authority of controlling the monetary policy of the country. To achieve maximum credit control and to ensure proper flow of funds in the country, RBI implements certain regulations on banks. Such regulations control the interest rates of different financial products.
  • Recession- Simply put, recession means economic slowdown. During times of recession, RBI increases money supply in the market by lowering the interest rate on the cash stock or deposits in the bank, as a result FD interest rates decrease.
  • Inflation- Inflation means price rise which can lead to rupee devaluation and reduction of purchasing power over lent amount. Therefore, to remunerate the loss in interest of the lent loans, banks attract more cash by offering higher interest rates on term deposits.
     

Fixed Deposit Calculator

An online financial tool that allows you to calculate the maturity amount or the returns on your fixed deposit, is a Fixed Deposit Calculator. This FD calculator is similar to a normal calculator and it works on your inputs. You just need to enter a few details related to your fixed deposit, such as the deposit amount, tenure and interest rate, and this online financial tool displays the maturity yields of your FD scheme.

PaisaBazaar’s Fixed Deposit Calculator

At PaisaBazaar, we are happy to offer you an easy-to-use and convenient online financial tool, the fixed deposit interest calculator. This FD calculator can be accessed anytime and anywhere by just visiting our website. Forget the hassles of complex and lengthy calculations, and just utilize our fixed deposit calculator to calculate the amount that your fixed deposit will yield at the end of its maturity period.

How does PaisaBazaar’s Fixed Deposit Calculator work?

Our FD Calculator is the simplest type of interest calculator. It is user-friendly and saves your time by displaying the result within seconds! PaisaBazaar’s fixed deposit calculator determines the returns of an FD according to the following inputs:

  1. Deposit Amount

It is the amount that you invest in an FD. This investment has to be made only once and you have the freedom to invest any amount according to your wish, with Rs 5,000 being the minimum.

  1. Rate of Interest

It is the rate of interest that is offered on the deposit amount. And it varies with the deposit amount and tenure.

  1. Deposit Tenure

It is the tenure for which the investment is made. Flexible tenure options are available ranging between 7 days and 10 years.

The moment you enter the above mentioned details, the FD calculator displays the maturity amount instantly! This maturity amount is calculated based upon the FD details you enter. Our FD interest calculator saves your time and can be used infinite number of time for free!

This FD Calculator is of great use if you are contemplating to invest money in any of the FD Schemes. You can calculate the returns of FD schemes offered by different Banks and financial institutions. Based upon the results you can choose the FD scheme which offers you the highest benefits. Fix deposit calculator, thus allows you to make the wise choice by giving you the opportunity to compare the returns of different Fixed Deposits on offer.

We understand that your hard-earned money needs to be deposited in a way so as to yield the best returns. Therefore, we advise you to make use of our FD Calculator which gives accurate and quick solutions within seconds of your inputs.