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Fixed Deposit Calculator

Calculate your Fixed Deposit returns and plan your investments better.

Total Interest

₹6,500

Maturity Amount

₹1,06,500

Interest Rate (p.a.)

6.50%

Understanding Fixed Deposits

A Fixed Deposit (FD) is a financial instrument that provides a higher rate of interest than a regular savings account, until the given maturity date.

How is interest calculated?

Interest is calculated based on the principal amount deposited and the fixed interest rate. The interest is paid out in installments according to the selected payout frequency.

Key Features

  • Fixed interest rate throughout the term
  • Multiple interest payout options
  • Premature withdrawal allowed with penalty
  • Can be used as collateral for loans
  • TDS applicable on interest earned

Benefits

  • Higher interest rates
  • Consistent returns
  • Flexibility in terms of maturity
  • Can be used as collateral for loans
  • Simple to set up and manage

Important Considerations

  • Fixed interest rate
  • Multiple interest payout options
  • Premature withdrawal penalty
  • Can be used as collateral for loans
  • TDS applicable on interest earned

How to Set Up a Fixed Deposit

  • Select the amount to deposit
  • Select the interest rate
  • Select the maturity period
  • Choose the interest payout frequency

Types of Fixed Deposits

  • Fixed Deposit (FD) - Fixed interest rate
  • Term Deposit (TD) - Variable interest rate

Interest Payout Options

  • Monthly
  • Quarterly
  • Half Yearly
  • Yearly
  • At Maturity

Premature Withdrawal Penalty

No penalty for premature withdrawal of FDs.

Can FDs be used as Collateral for Loans?

Yes, FDs can be used as collateral for loans.

TDS on Interest Earned

TDS is applicable on interest earned from FDs.

Example

Suppose you deposit ₹10,000 in a 1-year FD at 6.5% interest rate, with monthly payout. The maturity amount will be ₹1,06,500. The interest earned will be ₹6,500.

Principal Amount

₹10,000

Interest Rate

6.5%

Maturity Amount

₹1,06,500

Interest Earned

₹6,500

Formula

A = P(1 + rt)

Where:

  • A = Final amount
  • P = Principal amount
  • r = Interest rate (in decimal)
  • t = Time period

Conclusion

Fixed Deposits (FDs) offer a higher interest rate than regular savings accounts, making them a good investment option for those seeking higher returns. The interest rate is fixed throughout the term, making it easier to plan for your future needs. However, it is important to consider the risk associated with FDs, such as the potential for premature withdrawal penalties and the risk of default.

Frequently Asked Questions

What is a Fixed Deposit (FD)?

A Fixed Deposit (FD) is a financial instrument that provides a higher rate of interest than a regular savings account, until the given maturity date.

How is interest calculated?

For simple interest: A = P(1 + rt)

For compound interest: A = P(1 + r/n)^(nt)

Where:

  • A = Final amount
  • P = Principal amount
  • r = Interest rate (in decimal)
  • t = Time period
  • n = Number of times interest is compounded per year
What are the key features of a Fixed Deposit?
  • Fixed interest rate
  • Multiple interest payout options
  • Premature withdrawal penalty
  • Can be used as collateral for loans
  • TDS applicable on interest earned
What are the benefits of a Fixed Deposit?
  • Higher interest rates
  • Consistent returns
  • Flexibility in terms of maturity
  • Can be used as collateral for loans
  • Simple to set up and manage
What are the important considerations when setting up a Fixed Deposit?
  • Fixed interest rate
  • Multiple interest payout options
  • Premature withdrawal penalty
  • Can be used as collateral for loans
  • TDS applicable on interest earned