What is the Interest Rate for a 6 Months Fixed Deposit | AU Small Finance Bank
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# What is the Interest Rate for a 6-month Fixed Deposit?

If you’re looking to make a short-term investment but max out on your earnings, a Fixed Deposit (FD) could be your safest bet. FDs are great because you can choose whether you’d like to invest for just 7 days or lock your money away for a good 10 years.

## What is the interest earned on 6 months FD?

The interest you earn depends on the amount you invest. If you invest with AU Bank in a 6-month FD, you will earn up to 8.80%* p.a. interest. So, let’s take a few examples (keep in mind AU Bank compounds interest annually). *T&Cs apply.

• On Rs.1 lakh, you can earn Rs. 6,900. Your maturity amount will be Rs. 1,06,900.
• On Rs. 5 lakh, you can earn Rs. 34,500. So, you get back Rs. 1,34,500.
• On Rs.10 lakh, you earn Rs. 69,000. So, you’ll get Rs. 1,69,00 returned to you.
• On Rs. 20 lakh, you earn Rs. 1,28,000. So, your maturity amount is Rs. 21,28,000.

The bigger your investment, the bigger the payout.

## How to calculate Fixed Deposit interest for 6 months?

Usually, people don’t like to look at formulas. They are difficult to understand and doing the calculations seem too hard. So, you’ll notice how banks and a lot of other online portals provide calculators for just about anything. In a fixed deposit interest calculator, you’ll find the options to enter the following details:

• Principal
• Tenure
• Interest Rate
• Compounding basis

Once you do this, the calculator will show you the FD interest amount you can earn as well as your maturity amount.

## What is the FD interest calculation formula?

Though formulas seem complex, once you understand them, it’s actually really simple. You can calculate your FD maturity amount using this formula:

P (1+ i/n)nt

Where

P = Principal amount

i = Nominal rate of Interest

t = Time or tenure

n = Compounding frequency

For nominal rate of interest, you need to divide your interest rate by 100. So, 6.90/100 = 0.069. Let’s show you how to calculate FD maturity amount by using an example. Say you invest Rs.10 lakh for 6 months (i.e., 0.5 years) at 6.90% p.a., you get

P= Rs.10,00,000

i = 0.069

n = 1 (since it is annually compounded, there is only one time the bank compounds interest in a year)

t = 0.5

Thus, we arrive at 10,00,000 (1+0.069/1)1x0.5
Simplified to 10,00,000 x (1.069)0.5

1.069 to the power of 0.5 = 1.069 itself
So, 10,00,000 x 1.069 = Rs.10,69,000

It may seem complicated, but with a little study, you’ll easily get the hang of it.

#### Is monthly interest payout a good option?

This depends on what you want to get out of your FD. Considering it is only for 6 months, letting the interest accumulate in your deposit account would be better. Here’s why:

Interest will be calculated on the principal amount + the interest you earn every month. So, your maturity amount will be higher if you choose payout upon maturity.

However, if you need a monthly income, then the monthly payout option is a great one! Monthly payout is available for anyone, whether you are a regular citizen, a senior citizen or an NRI.

Ensure you bank provides you with this option. For example, AU Bank gives you this option if you invest for 3 months or more.

If you have idle cash that you don’t need for at least 6 months, investing in an FD is a quick and safe way to earn a little in interest. So, go ahead and invest in a fixed deposit! Your money does all the work for you while you reap the rewards of it. 