FD Calculator – Calculate Monthly Interest On Fixed Deposits in 3 Easy Steps

Moneycontain FD Calculator is designed in such a way that you you can now calculate the returns on your Fixed Deposits(FD) on monthly basis. To use the below FD Calculator, you have to enter the lumpsum amount you want to deposit, enter the expected rate of interest on your fixed deposit.

Than Chose the investment period (in months) thereafter you need to enter the compound interest paid to you on deposits, this can be 1 if interest is paid once in a year, 2 for half yearly, 4 for quarterly (which banks pays usually). In case if the interest is paid each month can enter 12 , so on and so forth. Know More about Compound Interest here.

FD Calculator will give you the future value i.e. the total amount you will get on maturity of your FD, as well as the total return earned on the initial investment made.


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What Is FD (Fixed Deposit)?

In simple terms Fixed deposit (FD) means depositing a fixed amount (usually lumpsum) in a bank or non-banking financial companies (NBFC) to get guaranteed interest earned on your initial invested amount. FD is a financial instrument which helps an individual to earn higher interest than saving accounts.

You can opt for the money(interest earned) to be given once at the maturity of the FD or at regular intervals. What i really like about fixed deposits is the guaranteed returns, which you as an investor will already know.

If we talk about other form of investments such as SIP in an mutual fund, the returns are not guaranteed, It may give you higher or lower return than your expectation. That is why usually people prefer to invest in FD more compare to any other form of investment.

Fixed deposits are made for fixed time period which ranges anywhere between 7 days to 10 years usually. Therefore Moneycontain Online Fd calculator can be a great tool if you are looking to make any investment through FD. You can also check moneycontain RD (recurring deposit) calculator here.

 



 

How Much Interest FD (Fixed Deposit) Gives?

Interest earn on FD are generally ranges between 4.5% to 9% it also depends upon the bank or NBFC you are choosing to make the FD. Moreover the tenure plays a significant role in returns, longer the tenure of investment more returns can be earned and vice-versa.

Check out the below image to know the Best FD returns providing bank in India 2021:

Best FD Returns By Banks In India:

 

FD Calculator - Calculate Monthly Interest On Fixed Deposits in 3 Easy Steps

 

Best FD Returns By Small Finance Banks In India:

 

How Much Interest FD(Fixed Deposit) Gives?

 

How Much Interest FD(Fixed Deposit) Gives?

 

Note: Returns shown in above image can be changed by bank depending upon their policies, kindly confirm with the banks about all details before making FD.

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How To Use Moneycontain FD Calculator?

Using moneycontain fixed deposit FD calculator is FREE and very easy to use, it just involves 3 steps :

Enter the amount you want to invest

Enter the expected return from your bank or NBFC

Enter the Time duration of your FD in months

Enter the compound interest paid to you by your bank (Usually 4 times(quarterly) in a year by most banks)

That’s it, moneycontain FD calculator will do the rest for you by telling the amount you will get upon maturity as well as the total interest you have earned over your investment.

The fixed deposit interest calculator or FD calculator can be used by any investor who wants to invest in fixed deposit and wants to get an estimate of wealth to be gained for a given investment amount.

It is very important for an investor to know the expected amount in advance and before making the investment. This will ensure whether the selected investment option will serve the financial goal of the investor at the maturity or not. Once an investor has the financial goal in his mind, he can also decide on which investment option to select.

For example: Let say, Priti is thinking to invest some money for her daughter who just turns 10 this year, she wanted to make sure, when her daughter turns 18 she can give her a support in education.

Priti can use moneycontain FD calculator to know the returns she can expect after 8 years. Suppose she decided to invest 1 Lakh rupees for a 8 year duration at a nominal interest rate of 8.5%. This is how much she will get on maturity.

 

How To Use Moneycontain FD Calculator?

 

Incase if the interest is compounding every month, Select the compounding period as 12, FD calculator monthly interest can be easily found through this.

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How Accurate Is Moneycontain FD Calculator?

Moneycontain online FD calculator is as accurate as any other prominent bank such as HDFC,  for reference I have taken a snapshot from HDFC Bank website with the same amount, tenure and interest as discussed in above example.

Check this:

How Accurate Is Moneycontain FD Calculator?

 

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How FD Calculator Works?

FD calculator primarily works on two mathematical formulas, you might have studied them in school for sure. The first one is Simple Interest and other is Compound Interest. Let us know about them in brief and understand how FD calculator works through this formulas.

What is Simple Interest?

Simple interest is the interest earned on an investment at a pre-decided rate of interest for a specific period of time. It is calculated by multiplying the principal amount, the rate of interest per annum and the time for which the money is lend in years.

What Is The Formula for Simple Interest?

 

How FD Calculator Works?

 

Moneycontain Simple Interest Calculator:

You can use moneycontain free online simple interest calculator as well to know the amount you will get from your FD at the maturity. However keep in mind simple interest is applied only to your initial invested amount (principal amount) and not on the returns you are getting.

Usually, the interest for FD with a period of 6 months or less is calculated at simple interest. Compounding of interest is done for FDs with a term period of more than 6 months.

Try by entering some values below:


 

SI = P x R x T/ 100

Where,

SI = Simple Interest

P = Principal (amount invested)

R = Rate of Interest (in %)

T = Tenure (time for which deposit is kept in FD account)

For example, if a sum of Rs 15,000 is invested for 5 years at 10% interest rate per annum, then at the time of maturity,

SI = 15,000*10*5/100 = Rs 7,500

Maturity Amount = Rs 22,500

 

What is Compound Interest?

In simple terms compounding means the ability of money to grow when the gains of year 1 is reinvested for year 2 or more. Compound interest is the interest earned on principal as well as interests.

It is calculated by multiplying the principal amount with the interest rate raised to the number of periods in years for which the interest will be compounded. Checkout moneycontain compound interest calculator here.

What Is The Formula for Compound Interest?

 

FD Calculator - Calculate Monthly Interest On Fixed Deposits in 3 Easy Steps

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

Where,

A = Maturity Amount

P = Principal amount

r = Rate of Interest (in decimals)

n = number of compounding in a year

t = number of years

For example, if a sum of Rs 15,000 is invested for 5 years at 10% compound interest rate (quarterly compounding), then at the time of maturity,

A= 15,000 {1 + (0.1/4)} ^ (4 * 5)

A = 15,000 (1 + 0.025) ^ (12)

A = 15,000 (1.025) ^ (12) = Rs. 24,579

Compound Interest (CI) Earned over 5 years = Maturity Amount – Principal Amount

CI = 24,579 – 15,000 = Rs. 9,579

 



 

Difference Between Simple Interest and Compound Interest?

Simple interest is calculated on the principal, or initial invested/loaned amount whereas Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods, and can hence be called as “interest on interest.”

One of the prominent scientist of this century, Nobel Prize winner in Physics Albert Einstein quoted once about same.

He said “Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it.”

 

What Are Benefits of Fixed Deposit (FD)?

There are many benefits or say advantages of doing Fixed Deposits let us touch them one by one:

1. Better/Higher interest rates

FD does gives higher interest rates than the interest rate offered on savings account deposits. If you are investing for long term duration one can expect more better returns on invested amount.

2. Assured/Guaranteed returns

One can rest assured about the returns from fixed deposit as they are predefined and does not depend on any stock market fluctuations. One should be able to know the returns from his/her investment before investing. Due to guaranteed returns from FD it is most trustworthy type of investment for people.

3. Major Tax Benefit

Investors can claim deductions for up to Rs. 1.5 lakh per financial year under section 80C up to Rs 1,50,000 under the Income Tax Act, 1961. The interest is added to the income of the taxpayer and taxed at the applicable tax slab rates.

4. Flexibility of Investment Period

The tenure or investment period on a fixed deposit (FD) is very flexible. As an investor you can select any tenure ranging from 7 days to 10 years. You can also invest in multiple fixed deposits with various tenures with the same or different bank and NBFC.

5. Highly Liquid

A process of easily buying and selling can be termed as liquidity. An investment can be called as liquid when it can be easily converted into cash. FD gives investor a free hand In case of any emergencies, you are free to withdraw the investment. However, a small penalty fee will be levied and the balance amount will be credited to your bank account.

6. Loan Benefit

In case if there is requirement of loan you can take benefit from your FD to avail a loan avail against a fixed deposit. You can get a loan up to 90% of the principal amount invested. Simultaneously, you will earn interest on the fixed deposit and pay interest on the loan.

 



 

What Are Disadvantages of Fixed Deposit(FD)?

As an investor doing investment in any financial instruments such as stocks, mutual fund, gold, bonds, real estate or for that matter FD, you should be aware of the drawbacks or disadvantages as well, let us know them step by step in case of FD:

1. Interest Rate and Inflation

Many investors who invest money through FD, does not count the rate of inflation.

Most first time investor miss this point, they only think, ok this will be the amount i would be getting at the end of my FD. However, with time the value of money changes, what i means to say the value of Rs.100 after 25 Years would not be the same.

Due to inflation the prices or goods of any economy or country increase over a period of time. Hence you should account inflation while calculating your FD returns.

To account inflation in your future value investments either drop the expected rate of return on investment, for example, if you are expecting 9.5% return on your investment you need to subtract the inflation rate for same period.

So, let say the average inflation for last 5 years is 3.5% so instead of taking 9.5% expected return, you count your return on 6%. You can get the inflation rate from here for India.

To find the real interest rate, we take the nominal interest rate and subtract the inflation rate.

Real interest ratenominal interest rate − inflation rate.

At the same time there is another method or concept called present value or discounting, this helps you in knowing the (PV) present value of your future investments.

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2. Tax on interest earned

The interest earned from fixed deposit is taxable. The tax deducted at source on FD can range from 0% to 30%, depending on income tax bracket of the investor.

Financiers deduct 10% TDS if your interest earned is more than Rs. 10,000 in a year, if your PAN details are available with them. However, in case your PAN details are not provided to your financial institution, 20% TDS will be deducted.

If your total income is below the minimum tax slab of 10%, you can claim a refund of the deducted TDS. You can also avoid the deduction by submitting Form 15G to your financial institution, and submitting Form 15H if you’re a senior citizen.

If you fall in the higher tax bracket (20% or 30%), you would have to pay extra tax over and above the TDS deducted by your NBFC or bank

3. Penalty on premature withdrawal

Many people ask, Do I need to pay any penalty on premature closure of Fixed Deposits? Answer is Yes, A premature withdrawal from FD attracts a penalty and lowers interest. Therefore before making up your mind to invest money be assured about whether you can keep that amount for a particular period of time or not.

4. Insurance of the FD

The amount invested in fixed deposits is insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs 1 lakh per bank per account. Which means if the bank or your NBFC company makes a default, DICGC can only secure up to Rs.1 lakh.

Hence it becomes very important for you to select good renowned banks or NBFC before making any fixed deposits. Never put all eggs in one basket

 

What Is Monthly Interest On Fixed Deposits?

Banks and NBFC gives investor various schemes while making a FD. You can get a monthly interest payout, if you choose periodic payouts, and select monthly frequency.

When you invest your money in FDs, you gain interest on your principal amount, which can be obtained periodically.

If you’re looking for a monthly income from your investment, you can choose to get your interest payouts on a monthly basis.

However, your interest rate changes based on your interest payout frequency. The more frequently you withdraw your interest, the lesser interest you gain.

 



 

Conclusion:

I hope you have tried calculating the returns by using the moneycontain FD calculator, doing a manual calculation takes much of time, therefore feel free to use the FD calculator anytime you want.

Doing an investment with less risk may give less returns but what is most important is the peace of mind. That is why people usually makes investment in FD rather than any other form of investments.

You can also check Moneycontain Monthly SIP Calculator to know how much need to invest today to reach your future financial targets.

Checkout the impact of inflation on your returns as well as your life using moneycontain inflation rate calculator and calculate your future expenses easily.

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Note: Please do not take this as any recommendation, to trade or invest. This is just for reference, to make you understand more about the usage of FD calculator and its importance, under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset.

Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only. All investments are subject to risks, which should be considered prior to making any investments

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