FD (Fixed Deposit) Calculator
Use our FD Calculator to estimate the maturity amount of your fixed deposits. Learn how fixed deposits work, their benefits, and more below.
Calculate Your Fixed Deposit Returns
What is a Fixed Deposit (FD)?
A Fixed Deposit (FD) is a financial instrument provided by banks and non-banking financial companies (NBFCs) that offers investors a higher interest rate than a regular savings account, until the given maturity date. It is considered one of the safest investment options as it offers a guaranteed return on investment. Fixed deposits are typically for a fixed term ranging from a few months to several years, and the interest is either paid at maturity or on a regular basis.
How Does the FD Calculator Work?
The FD Calculator helps you estimate the maturity amount of your fixed deposit by considering the following parameters:
- Principal Amount: The initial amount of money invested in the fixed deposit.
- Annual Interest Rate: The interest rate offered by the bank or financial institution on the fixed deposit.
- Tenure: The duration for which the money is invested, typically in years.
The calculator uses the compound interest formula to estimate the maturity amount:
Maturity Amount = P × (1 + r)^n
Where:
- P: Principal amount
- r: Annual interest rate
- n: Tenure in years
Benefits of Fixed Deposits
- Guaranteed Returns: Fixed deposits offer a guaranteed return on investment, making them a safe option for risk-averse investors.
- Flexible Tenure: Investors can choose the tenure of their FD based on their financial goals, ranging from a few months to several years.
- Higher Interest Rates: FDs generally offer higher interest rates compared to regular savings accounts, leading to better returns on savings.
- Tax Benefits: Some fixed deposits, like tax-saving FDs, offer tax benefits under Section 80C of the Income Tax Act.
- Loan Facility: Investors can avail loans against their fixed deposits at competitive interest rates, providing liquidity without breaking the FD.
Frequently Asked Questions (FAQ)
1. Can I withdraw my FD before maturity?
Yes, you can withdraw your FD before maturity, but it may incur a penalty in the form of a reduced interest rate or a fee. It's advisable to check with your bank or financial institution for specific terms.
2. Is the interest earned on FD taxable?
Yes, the interest earned on a fixed deposit is taxable. The bank may deduct TDS (Tax Deducted at Source) if the interest earned exceeds a certain threshold. However, you can declare the interest in your income tax returns and claim a refund if applicable.
3. What is the difference between cumulative and non-cumulative FDs?
In a cumulative FD, the interest is compounded and paid at the end of the tenure along with the principal. In a non-cumulative FD, the interest is paid out periodically (monthly, quarterly, half-yearly, or annually) during the tenure.
4. Can I take a loan against my FD?
Yes, most banks and financial institutions allow you to take a loan against your fixed deposit. The loan amount is usually up to 90% of the FD value, and the interest rate is generally lower than that of personal loans.
5. What is the minimum and maximum tenure for an FD?
The minimum tenure for a fixed deposit can range from 7 days to 1 year, while the maximum tenure can go up to 10 years. The tenure options vary across different banks and financial institutions.