Fixed Deposit (FD) is one of the most popular investment options that offer guaranteed returns with low risk. They are the most trusted financial instrument with a one-time deposit scheme.
Many banks and NBFCs are offering 3-year Fixed Deposits also known as Term Deposits with good rates of interest.
You can use a fixed deposit calculator to check the maturity value and amount of interest earned on your term deposit even before opening your account.
Using an FD calculator is very easy, convenient and time -saving.
Since an FD calculator is free to use, you can use it as many times as you want without any hassles.
Financial organizations offer a higher rate of interest on fixed deposits as compared to regular savings accounts. However, interest rates vary from one fiscal unit to another.
Generally, interest is calculated in two ways:
Periodic Interest Payout Scheme: Wherein the interest rate remains the same throughout the tenure of fixed deposit. You are eligible to receive a fixed amount of interest at the end of every month/quarter.
Cumulative Deposit Scheme: Wherein you are eligible to receive returns on a compounding basis. An FD calculator allows you to arrive at the amount of maturity of fixed deposit using compound interest formula.
A= Maturity amount to be received
P= Amount of deposit/Principal amount
R= Interest rate
N= The number of times interest is compounded each year
T- The time period for which amount is deposited
You are investing INR 5,00,000 in your term deposit for 3 years at the rate of 10% interest compounded quarterly.
Now to know your Maturity amount (A):
P= 5,00,000; T= 3 years; R= 10%, N=4
As per the formula,
A=Rs 500,000*(1+0.1/4)^(4*3)= Rs 500,000*(1.025)^12= Rs 672,444
Therefore, the amount at the time of maturity is Rs 6,72,444
And the Interest earned is 672444-600000= Rs 72,444
Doing manual calculations could be lengthy and nerve-racking. Using a Fixed Deposit Interest Rate Calculator can help you plan your investments better with error-free results. It's very user-friendly. The FD calculator allows you to make the wisest choice with your FD scheme.
It is advisable to go for a cumulative scheme as the interests earned under this are automatically reinvested resulting in better returns. However, if you need an income urgently, you can prefer the regular income option.
Let the value of your savings grow with AU Bank’s 3-year Fixed Deposit Scheme. With the current interest rate scenario, AU Bank can Give you a much higher rate of return.