# Fixed Deposit Interest Calculator l Learn How the Tool Works

How frequently have you heard the term FD? As a young child, you might have overheard your family mention it. You might not have known then what an FD was, how it worked, or why it was a crucial investing tool. However, fixed deposits, often known as FDs, are a common way to invest and offer advantageous returns.

Banks and other financial institutions provide fixed deposits, which are longer-term investments that pay higher interest rates. FDs are extremely popular because of how useful they are. In difficult financial circumstances, these can save the day, or they can be used to achieve one’s long-term financial objectives. Therefore, before making an investment, it is essential to educate yourself about FDs are familiar with the use of a fixed deposit interest calculator.

Starting off, let us have a look at what is a fixed deposit interest calculator and how the tool works.

What is a Fixed Deposit Interest Calculator?

A Fixed Deposit Interest Calculator is a financial tool used to calculate the maturity value of your investment plan according to one’s desired tenure and a set interest rate. With a fixed deposit interest calculator, you can analyse the maturity amount of your FD by entering the duration of your investment and the rate of interest.

A fixed deposit interest calculator proves to be exceptionally useful in comparing investment options. Ergo, it is essential to understand the working of the tool for investing in FDs.

How is the Fixed Deposit Interest Calculated

A Fixed Deposit Interest Calculator considers various variables in calculating the maturity value mentioned below.

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

A = Value of Maturity

I = A – P

P = Principal sum

r = Interest rate

n = Compound interest rate

t = Number of years

I = Total interest earned

Let us have a look at an example to understand the calculations-

The interest earned at maturity, assuming you deposit Rs. 40,000 and hold it for 5 years at a 10% quarterly compounding interest rate, would be:

A = 40,000 {1 + (0.1/4)} ^ (4 * 5)

A = 40,000 (1 + 0.025) ^ (20)

A = 40,000 (1.025) ^ (20)

= Rs. 65,545 (approximately)

CI = Maturity Amount – Principal Amount

CI = Rs. 67,244 – Rs. 50,000

= Rs. 25,545

This is how the maturity value of your FD is calculated manually. However, using a fixed deposit interest calculator makes computations even easier for you and saves you the painstaking hassle of calculating values manually.

How to Use a Fixed Deposit Interest Calculator Online

A Fixed Deposit Interest Calculator can be found easily online. Follow the steps mentioned below to operate it-

Step 1: Open a fixed deposit interest calculator of your choice online.

Step 2: Enter the tenure, principal amount, and rate of interest. Press view plans.

Step 3: The plans will be displayed, and you can select the best-suited one for yourself.

A fixed deposit interest calculator doesn’t just make calculations easy for you; it offers many more benefits. Let us have a brief look at them.

Benefits of a Fixed Deposit Interest Calculator

• It assists in preventing calculation errors because it utilises a mathematical formula online.
• Given that it runs the entered figures automatically, it helps save time.
• There is no fee to use these calculators. You can enter several configurations and set the rates as per your wish.

Although FDs are a safe way to invest, you must be aware of all of your outstanding debts and payments before beginning a new investment. This will guarantee a consistent and stress-free investment approach. You must check your cibil report because it contains details about one’s credit ratings and history. It takes only a few quick and easy steps to retrieve your Cibil report online.

How to Determine Your Cibil Report

Step 1: Go to CIBIL’s official website.

Step 2: Select “Get free cibil score and report”

Step 3: Create a new account by entering the required details.

Step 4: Select “Accept & Continue”.

Step 5: Your registered mobile number will receive an OTP. Type in the OTP, then select “Continue.”

Step 6: You will see a screen saying, “You have successfully enrolled!” Toggle to ” access Dashboard. Your credit score will be available for viewing.

Step 7: “myscore.cibil.com”- a new tab will be displayed on your screen.

Step 8: Finally, to view your Cibil report, select “Member Login” and enter the required details. You will be able to access your Cibil report.

In conclusion, while considering investing in fixed deposits, employing a fixed deposit interest calculator is a necessary and inevitable step. Since you must invest a big sum of money in such an investing plan, it is advisable to thoroughly research all of your possibilities upfront.