How Do 3-Year Fixed Deposits Work? | AU Small Finance Bank
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How do 3-year Fixed Deposits Work?

    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.

    How to use a Fixed Deposit calculator?

    Using an FD calculator is very easy, convenient and time -saving.

    Just follow these few simple steps and find out your maturity amount in seconds:

    • Select the type of customer you are (either new customer, existing loan customer or a senior citizen)
    • Choose whether you want a cumulative fixed deposit or a non-cumulative one
    • Enter the amount which you want to invest in your FD account
    • Mention the rate of interest offered by your lender
    • Provide the tenure of your deposit
    • Click on ‘Calculate’
    • The total amount along with the interest that you will earn on your FD amount is displayed instantly.

    Since an FD calculator is free to use, you can use it as many times as you want without any hassles.

    How is Fixed Deposit Interest Calculated?

    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.

    Calculate Compound Interest with this Formula:

    A=P(1+r/n)^(n*t)

    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

    For instance,

    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.

    Why opt for a 3-year Fixed Deposit with AU Bank?

    • AU Bank provides an interest rate of 8.88% interest rate p.a. for senior citizens. This rate is subject to change.
    • No TDS deduction if the interest payout is less than INR 40,000 in a year
    • AU Bank offers an online banking facility for easy access to accounts details and managing finances
    • The maturity amount is auto credited to your account.

    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.


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