If you are juggling to invest in short-term investment plans or unable to decide on the right one, among the various available options, FD is the safest option that you can consider is a financial tool that comes with a fixed rate of interest until a given maturity date. These offer a higher rate of interest than a savings account. So, keeping your money in FD accounts will lead to handsome earnings. FDs are the best option for beginners who can start investing by opening an account with any of their preferred banks. The rate of interest may differ from bank to bank and decided by the bank only.
But, what if you can calculate Fixed Deposit ROI on your own? Yes, it is possible with the help of Fixed Deposit calculator.
What is Fixed Deposit Calculator?
Fixed deposit calculator is an online tool that helps you calculate how much rate of interest you can earn by investing in an FD account for a fixed tenure. By simply providing certain information, one can easily calculate FD interests. Online FD calculator is used to determine the maturity amount by applying compound interest on a monthly, quarterly, half-yearly or annual basis.
The FD calculator considers the deposit tenure, the type of fixed deposit scheme, the principal investment and the rate of interest offered by the bank, to calculate the return value at maturity. It is recommended by the financial experts to use FD calculator to know the value of your investment, before applying for one.
How Does an FD Calculator Work?
Though FDs don’t offer a lucrative return, they are the safest investment avenue on the earth! By using FD calculator India, rates of interests can be checked even before opening an account. At the time of calculation, both the simple and compound interest are considered. The initially invested amount will be calculated with simple interest where the principle and the subsequent amount are calculated based on the offered compound interest. FD calculator makes it easier for an investor to calculate the maturity amount to be earned. Fixed deposit calculator shows the rate of interest basis of certain inputs provided by the FD seekers such as deposit amount, deposit tenure and the offered rate of interest.
How to Calculate Monthly Interest?
FD calculator is an efficient and speedy way to calculate the rate of interest you can earn monthly on your FD account. Being one of the most useful online tools, it allows the individual to know the earnings on the maturity even before opening a fixed deposit account.
Factors to be Considered
In order to calculate the rate of interest on FDs by using FD interest calculator, you should consider the following factors:
- Deposit Amount: This is the amount you invest to open an FD account. The best part of an FD is that one can invest with a minimum of Rs. 1000.
- Interest Rate: The rate of interest may vary depending on the FD tenure and from bank to bank. Moreover, the different financial institute offers different ROI.
- Deposit Tenure: It is based on the tenure you have chosen for investing your money. However, you will have to invest for a minimum of 7 years to 10 years on FDs.
- The frequency of Compound Interest: This calculates the maturity amount to be earned at the end of the tenure on monthly, quarterly, semi-annually or annually.
How does Policy Bazaar’s FD Calculator Work?
The fixed deposit calculator at Policybazaar.com has been designed to meet the requirements of its users and to provide adequate information. By using FD calculator tool, you can effortlessly calculate your interest. It reduces the need for manual calculation of interest. Sometimes, these calculators are more effective even than a computerised spreadsheet. All you need to do is to provide some information such as:
- Mention the amount you need to invest in a deposit scheme
- Tenure for which, the decided amount is to be paid
- Provide the rate of interest offered by the financial institute
After submitting these details, you will need to click on the ‘Calculate’ button. The maturity amount that you can earn will be displayed. This way you can decide whether to open an account or not. Moreover, it saves time and money as well. By making real-time calculations, you can compare various fixed deposit schemes offered by the banks and companies and decide the highest interest paying schemes. You can directly apply via navigating to the relevant FD scheme page.
Current Rate of Interest on FDs
Currently, the rate of interest offered on bank Fixed Deposits may range from 7 or 8 per cent, with an extra of 0.5% for senior citizens. However, the different banks offer different rates. Therefore, with an FD interest rates calculator, you can get a rough idea on various rates and come across the scheme that fulfils your requirements.
Top 10 Banks Fixed Deposit Interest Rates in India
|Bank Name||Tenure||Interest Rate(p.a.)|
|Axis Bank||7 days - 10 years||3.50% - 7.00%|
|Bank of Baroda||7 days - 10 years||4.50% - 6.70%|
|Bank of India||7 days - 10 years||5.25% - 6.35%|
|Canara Bank||7 days - 10 years||5.75% - 6.20%|
|Central Bank of India||7 days - 10 years||4.80% - 6.55%|
|HDFC Bank||7 days - 10 years||3.50% - 6.50%|
|ICICI Bank||7 days - 10 years||4.00% - 7.00%|
|IDBI Bank||7 days - 10 years||6.25% - 7.00%|
|State Bank Of India||7 days - 10 years||5.75% - 6.85%|
|Yes Bank||7 days - 10 years||5.00% - 7.25%|
Top 10 Banks Fixed Deposit Interest Rates in India for Senior Citizens
|Bank Name||Tenure||Interest Rate(p.a.)|
|Axis Bank||7 days - 10 years||3.50% - 7.50%|
|Bank of Baroda||7 days - 10 years||5.00% - 7.20%|
|Bank of India||7 days - 10 years||5.25% - 6.85%|
|Canara Bank||7 days - 10 years||6.25% - 6.70%|
|Central Bank of India||7 days - 10 years||5.30% - 7.05%|
|HDFC Bank||7 days - 10 years||4.00% - 7.00%|
|ICICI Bank||7 days - 10 years||4.50% - 7.50%|
|IDBI Bank||7 days - 10 years||6.75% -|
|State Bank Of India||7 days - 10 years||6.25% - 7.35%|
|Yes Bank||7 days - 10 years||5.50% - 7.75%|
If you are willing to invest in FDs, you should know a little more about these schemes-
Some Related Terms
Compound Interest Calculator
The compound interest calculator is an online financial tool that allows users to input deposit details such as the amount to be deposited, the tenure of deposit, the offered rate of interest on the chosen FD scheme and the compounding frequency. The complete process takes a minimal time and the process takes a few easy steps. With FD calculator monthly interest tool, comparing and getting user-friendly FDs is a matter of a few clicks now.
Simple Interest and Compound Interest
The interest on FD schemes is calculated in two ways- Simple and Compound Interest. Simple interest method allows the investor to calculate the interest on the principal amount. It doesn’t matter how often the interest is calculated, it is always calculated on the initial deposit amount (principal). On the other hand, when the principal amount and the interest earned thereon are considered to calculate the interest, it is called compound interest. By using FD return calculator, you can calculate the interest earned on both types of interests.
Fixed Deposit Tenure
FD tenure is a period for which a fixed amount is invested or locked. The tenure can be ranged from 7 years to 10 years. However, the tenure may vary depending on the terms and conditions of a financial institution. That’s why it is always recommended to compare the fixed deposits by using bank FD calculator online.
Point to be noted- the tenure you decide for investing will also decide the rate of interest. Higher the tenure, higher will be the ROI you are offered with.
FD Interest Rate
The rate of interests on FD is higher than the savings accounts. The interest depends upon the amount to be invested and the tenure. As different banks come with a different scheme and interests, it is beneficial to compare FD rates through an FD rate calculator online. Moreover, compounding frequencies also vary between FDs and normally done on a monthly, quarterly, half-yearly or yearly basis.
You can invest in an FD account only once. Every bank or financial institution comes with a different minimum opening amount. An investment can be started with as low as Rs. 5000 to something in Crores. You can use FD calculator and enter the principal amount, tenure and offered interest rate to get the more detailed information.
Income Tax Payable on Fixed Deposit (FD) Interest
Tax is applicable on income earned on FDs. So, based on the tax bracket, apart from the 10% paid by your bank, you may have to pay up to 33.99% towards tax on FD.
The taxable amount will be on accrual basis. For example, you make a cumulative deposit with a bank for 7 years and hence will receive the interest at the end of the tenure. Still, you must pay the tax on interest accumulated during each year.
Tax Deduction on Interests Earned
The rate of interests earned on FDs is liable for tax deduction at 10.30% on the interest paid. If the interest exceeds Rs. 10,000 in a financial year, the applicable TDS will be levied.
In the case of firms, the tax will be deducted if the interest earned exceeds Rs. 5000 in a year.
Types of Fixed Deposits:
Fixed deposits are of two types:
Periodic Interest Payout
Under this scheme, you will be eligible to receive a fixed interest at the end of every period or quarter. The rate of interest remains unchanged throughout the FD tenure and the entire principal amount will be repaid.
You may have studied compound interest in your math book in school. The returns are paid on a compounding basis and on the principal amount. Fixed deposit calculator allows you to know how much return you can earn on the principal amount on a compound interest.
Compound interest is added to the principal and paid on the earned interest. To calculate the interest the following formula has been used:
A = P (1+ r/n) n*t
- A= Amount to be received
- P= Principal amount
- The R= rate of interest
- N= number of times the interest is compounded per year
- T= tenure
Let’s imagine: you have invested Rs. 1500 in a bank for 6 years on the rate of interest 4.43%, compounded quarterly. The rate of interest and the final amount to be earned is:
P = 1500, r = 4.3/100 = 0.043, n = 4, and t = 6
Now, A=1500(1+0.043/4)4*6= 1938.84
After 6 years is Rs.1, 938.84 (or rounded to Rs.1939)
The interest amount will be: A - P = 1938.84 - 1500 = Rs. 438.84.
Benefits of Investing in a Fixed Deposit
The benefits of FD schemes are manifold:
- Guaranteed Returns: FD is a secure investment and offers assured returns for the investment you made.
- Encourages Saving Habit: As the investment is locked for a fixed tenure, it inculcates the habit of savings. Unknowingly you can develop this habit and save a handsome amount with compounding rates.
- More Interest than Savings Account: FD rates of interest are higher than the savings account. Thus, it yields better returns at maturity. A savings account can offer you a maximum of 6%, whereas, in an FD, the offered interest is 7% or more.
- Partial Withdrawal: FD schemes allow early withdrawal of the invested amount. However, one can withdraw 50% of the total amount on the account and requires a nominal penalty.
- Payment of Interest at Intervals: The depositor can earn interest at maturity, annually or monthly based on the exact term he/she choose at the time of opening an account.
- Flexible Tenure Options: Also, enjoy the benefit of flexible tenure and fix your hard-earned money as long as you wish to. The minimum tenure of an FD account ranges from 7 days to 10 years.
Fixed Deposit Vs Recurring Deposit
FD and RD come under the category of term deposits, which offer interest at the same rate for the entire tenure of the deposit. At maturity, the depositor earns accrued interest along with the principal amount.
However, FD of the same amount as that of RD always fetches higher returns. In the case of FD, the depositor can make lump sum investment and can earn interest for the year. Whereas, in case of RD the first deposit earns interest for 1 year, the second for 11 months, third for 10 months and so on.
Determining Factors of Fixed Deposit Interest Rate
However, fixed deposits offer a fixed interest rate throughout the tenure, the ROI can change at maturity and renewals or reinvestments are done at the maturity interest rate. So, it may increase or decrease as per the norms of the bank. That’s why it is important to compare the FD schemes on fixed deposit interest calculator and get a right option. However, following are some of the factors that may affect the rate of interest of FD:
- Reserve Bank of India (RBI) - Reserve Bank of India (RBI) is the central authority in India to manage and implement all monetary policies across the country. To maintain the maximum control and to keep a record of the flow of funds in the country, RBI executes certain regulations on banks. These regulations have a significant impact on the interests of various financial products.
- Recession - Recession leads to means economic slowdown. This time, Reserve Bank of India increases the supply of the money in the market by lowering the rate of interest on the cash or deposits in the banks. This results in a decreased rate of interests in FDs.
- Inflation - Inflation has a great influence on the country’s It leads to a devaluation of rupee and the decrease of purchasing power over the lent amount. In such situations, to pay the loss, banks collect more cash by imposing higher interests on deposits.
Why Use FD Calculator?
By calculating the rate of interest precisely, fd interest rates calculator allows you to plan your investments better. It is also useful in deposit renewals. The rate of interest, however, is fixed for the entire tenure, it may differ at maturity. Renewals of deposits are done at the prevailing rate of interest at maturity. Using fixed deposit interest calculator, you can also decide whether you should continue with the same scheme or switch to another FD scheme.
Calculate Maturity Amounts using Policybazaar FD Maturity Calculator
The above reasons are enough to make one realise the importance of FD calculator. The manual calculation can be tedious and there is much room for error. It is imperative to double-check the amount credited to your bank account either at the time of maturity or as pay-outs since there can be a mistake while calculating the returns by the bank or concerned financial institution. It gets more confusing when it comes to deciding on a scheme to determine maturity amount, especially when frequencies of compounding FD schemes differ from bank to bank. Here comes fixed deposit interest rate calculator in the picture, which helps you land on a right deal.
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