How Do I Calculate My Fixed Deposit?

Save & Invest

As per the Securities and Exchange Board of India (SEBI), more than 95% of people in India choose to save their money in fixed deposits. A fixed deposit (FD) is the safest investment option in India. We will explain the fixed deposit calculator in this article. This article also gives information on fixed deposits, their benefits, and other features.

What Exactly is a Fixed Deposit?

An FD is an amount that you deposit for a fixed period in banks and other financial institutions and earn a rate of interest. It is the safest option, as it also earns a higher rate of interest when compared to your savings account. An FD is traditionally the most preferred medium of saving in India.

All You Need to Know About FDs

  • Eligibility: To open an FD account, you have to be a citizen of India. You should be at least 18 years old.
  • Term (time period): The total period for a fixed deposit is from 7 days to 10 years, based on the institution where you deposit.
  • Do you need Savings Account to open an FD account? : You can open an FD account even if you do not have a savings account. But many banks and other institutions require you to have a savings account. 
  • Number of deposits: Once you deposit a lump-sum amount as a fixed deposit, you cannot deposit again in the same account. If you wish to deposit more, you have to open a new FD account. 
  • Minimum amount: The minimum amount you can deposit as an FD is different for every bank. In some banks, it starts at Rs. 1000.
  • Withdrawal: You cannot withdraw the principal amount before the prescribed period. If there is any emergency, you can withdraw the amount before the period. But you have to pay a penalty.

Benefits of a Fixed Deposit

  • Most trusted option: AN FD is the safest low-risk option. It is a highly trusted investment option in India that gives you the confidence to invest.
  • Safe principal amount: In a fixed deposit, the principal amount that you invest will not fluctuate due to market conditions or other reasons. So, you don’t need to worry about your principal amount.
  • Higher rate of interest: An FD gives you a higher rate of interest when compared to a savings account and other options.
  • Prior calculation: In a fixed deposit, you can calculate the rate of interest even before investing, using an FD calculator.
  • Loan benefit: You can use your FD as collateral (pledged as a security) and avail of a loan based on the amount you have deposited as an FD.
  • Tax exemption benefit: If you have an FD account, you can avail of tax exemption benefits as per Section 80C of the Income Tax Act of India (1966) up to Rs. 1.5 lakh per annum.
  • Saving habit: Having a fixed deposit increases the habit of saving. 

How to Calculate Fixed Deposit? 

There are generally two methods to calculate the interest rates on your fixed deposits. There is simple interest and compound interest.

Simple Interest (SI)

Simple interest is the easier method of the two. It is calculated by multiplying the principal amount, the total time period, and the rate of interest. The formula for SI is as follows:


                                  Simple Interest (SI) =  ——



P = Principal Amount

T = Total Time Period

R = Rate of Interest

For example, if you decide to deposit Rs. 10,000 at an interest rate of 10% p.a. for 1 year, then the rate of interest at the time of maturity will be as follows:


                                  Simple Interest (SI) =  —————— = 1000


Thus, the amount that you get back at the end of your one-year maturity period will be Rs 12,000.

Compound Interest (CI)

In this method, you will get your interest on two factors. It is based on the principal amount and the amount of interest. In other words, it is “interest on interest.” The interest for the first month will be like SI, but it changes from the second month on. To calculate CI, the principal amount is raised by the number of compounding periods. It is then multiplied by the interest rate. CI is expressed in years, and its formula is as follows:


                                  Compound Interest (CI) = P x (1+  —)  ^ nt



P = Principal Amount

r= Rate of Interest

n= Total number of compounding in a year.

t = Total Time Period

For example, If you decide to deposit Rs. 20,000 at an interest rate of 10% p.a. for 3 years, then the 


                                  Compound Interest (CI) = 20000 x (1+  —  )  ^ 3 = 26,620


Therefore, the amount that you will get back at the end of the maturity period will be Rs 26,620.

Benefits of the Fixed Deposit Calculator

Fixed deposits and interest rates can be calculated using the manual method. However, the manual method is time-consuming. The Fixed Deposit Calculator, on the other hand, will make your task easier and give you an accurate figure every single time you use it. You can use the FD calculator as many times as you wish. Fixed deposit calculators are error-free.

The Bottom Line

We hope you have understood FDs and their calculation. You can calculate FDs anytime using the online Fixed Deposit Calculator. Without any delay, open your fixed deposit account at a safe institution like Piramal Finance and get a higher interest rate. If you have any doubts, contact us. We will clarify your doubts and make the process easier. You can visit Piramal Finance and read a host of other related articles on FD calculators.