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What is FD?

FD, or Fixed Deposit, is a type of investment where you give a lump sum amount to a bank for a specific period. During this time, your money earns interest at a fixed rate, which is decided when you open the account. You can choose to get the earned interest monthly, quarterly, half-yearly, or annually.

Fixed Deposits are the safest investment options. Your returns are guaranteed, and there's almost no risk of losing what you put in. Plus, they give you better interest rates compared to Savings Accounts. It's a safe and smart move for anyone wanting steady and predictable returns with their money.

What is FD calculator?

FD (Fixed Deposit) Calculator is a simple tool that helps you figure out how much money you'll earn from a fixed deposit. You just input the amount you're depositing, how long you're keeping it in, and the interest rate, and it tells you your potential returns.

How is FD interest calculated?

There are two types of FD you can choose from - simple interest and compound interest FD.

1. Simple Interest

Simple Interest on Fixed Deposit

The formula of simple interest is M = P + (P x r x t/100)


M=Maturity amount

P =invested amount/ Principal amount

r = Rateof Interest

t = Time/investment period

Example: If you invest INR 15,000 for 5 years at a fixed interest of 10%, the simple interest is

M= Rs. 15,000+ (15,000 x 10 x 5/100)

M= Rs.22,500

2. Compound Interest:

For compound interest FD, the FD return calculator uses the following formula –

M= P + P {(1 + i/100) t – 1} 

Where -

M=Maturity amount

P =invested amount/ Principal amount

i = Rateof Interest

t = Time/investment period

For example, if you take the same variables, the compound interest FD will accrue,

M= Rs. 15,000 +15,000{(1 + 10/100) 5-1}

M= Rs. 24,579

Example: If you invest INR 15,000 for 5 years at 10%interest compounded quarterly would result in a maturity amount of approximately INR 24,579.

Features and benefits of a Fixed Deposit (FD) include:


  •  Fixed Tenure: FDs come with a predetermined tenure, and the invested amount is locked in for that specific period.
  •  Fixed Interest Rate: The interest rate for FDs is fixed at the time of investment, providing stability and predictability.
  •   Safety: FDs are considered a safe investment option as they are not subject to market fluctuations. The principal amount is typically secure, and returns are guaranteed.
  • Flexible Tenure Options: Banks often offer a range of tenure options for FDs, allowing investors to choose the duration that suits their financial goals.
  •  Liquidity: While FD shave a fixed tenure, banks may provide options for premature withdrawal in case of emergencies, although it might be subject to certain conditions and penalties.


  • Stable Returns: FDs offer stable and assured returns, making them an attractive option for conservative investors seeking a fixed income.
  • Risk Mitigation: Unlike market-linked investments, FDs carry minimal risk as the returns are not influenced by market fluctuations.
  • Financial Planning: FDs provide a reliable tool for financial planning, allowing individuals to forecast and accumulate savings over a specific period.
  • Tax Benefits: Some FDs provide tax benefits, such as the 5-year tax-saving FD, eligible for deductions under Section 80C of the Income Tax Act.
  • Easy to Understand: FDs are straightforward investment option, making them accessible even for those with limited financial knowledge.


What is FD?
Is the FD interest calculator free to use?
Do I need to pay any penalty on premature closure of Fixed Deposit?
How does the FD calculator help in future financial planning?