Fixed Deposits are a preferred choice for investors who favour stability. Those looking to invest in FDs can seamlessly manage their finances by utilizing the FD Calculator. This user-friendly online tool helps calculate the returns on FD investments by considering the investment sum, interest rate, and duration.
How FD Calculator Work?
To use an FD (Fixed Deposit) calculator effectively, you need to input three key details: the amount you're depositing, the length of time you plan to keep your money in the FD, and the interest rate, which can be compounded monthly, half-yearly, or annually. The process of using this tool is straightforward. Simply input your investment amount, the duration of the investment (in months or years), and the applicable interest rate. The calculator then takes these inputs, applies the specified compounding method, and calculates the maturity amount. This final figure represents the total of your initial investment plus the interest earned over the selected period.
How can a FD Calculator help you?
Determining the maturity amount for a fixed deposit (FD) can often be complex and time-intensive. However, with an online FD calculator, you can compute these amounts effortlessly.
- The process of calculating FD maturity involves various factors and can be intricate. A fixed deposit calculator simplifies this by providing precise calculations instantly with just a click.
- This tool significantly reduces the time spent on these elaborate calculations.
- An FD return calculator also allows you to compare the maturity sums and interest rates provided by different banks or financial entities. Having access to this detailed information helps you make well-informed financial decisions.
Fixed Deposit Maturity Amount Calculation
Interest on FD is compounded quarterly, in most banks.
The formula for this is: A = P * (1+ r/n) ^ n*t ,
where ,
- I = A – P
- A = Maturity value
- P = Principal amount
- r = rate of interest
- t = Number of years
- n = Compounded interest frequency
- I = Interest earned amount
Example of FD Calculation
Let's say you invest Rs. 2,00,000 in an Indian Bank FD at 6.5% per annum for 2 years.
Using the simple interest formula:
Maturity Amount = Principal + (Principal * Rate * Tenor)
= 2,00,000 + (2,00,000 * 0.065 * 2)
= 2,00,000 + 27,527
= Rs. 2,27,527
So, the maturity amount on your Rs. 2 lakh Indian Bank FD after 2 years at 6.5% interest will be Rs. 2,27,527.
How to use ClearTax FD Calculator?
You can calculate FD returns by using ClearTax FD Calculator, the process is given below:
- Enter the investment amount in the calculator
- Now enter, for how many months you want to stay invested
- Finally, fill details about the interest rate
- The calculator will automatically give you the result with a break of principal amount and earned returns.
Advantages of FD Calculator
The calculator offers different benefits to investors. These advantages are as follows:
- Accessible:
This calculator can simply be accessed through the official website of the bank. Investors can use this feature at any time and from any place.
- Efficient:
Investors can rapidly evaluate different investment situations and look at possible returns without the requirement for lengthy calculations.
- Transparent:
The Central Bank of India FD calculator provides investors transparency and empowers them to pursue informed choices according to their financial objectives.
- Accurate:
The Central Bank of India FD calculator gives exact estimations and reduces the possibility of any possible errors associated with manual calculation.
Tax Benefits on FD
Similar to other personal tax-saving and investment instruments, Fixed Deposits schemes also attract taxes. A TDS of 10% is deducted on the returns accrued from an FD if the total interest exceeds Rs. 10,000 in a single financial year. Let’s compare this to the SIP scheme and you can see that SIPs are more beneficial for the long term. Since long-term gains from equity are tax-free, any SIP which invests in ELSS (Equity Linked Mutual Funds) is also tax-free after one year.