What is Fixed Deposit?
Fixed Deposit is a kind of deposit with comparatively higher rate of interest. The interest rate is fixed for the whole time period. It is considered as one of the safest investment option. It is used to determine the result amount by applying compounded rate of interest on a monthly, quarterly, half-yearly or annual basis.
How our fixed deposit calculator works?
||It is the one time investment that you want to do on fixed deposit
|Expected Interest Rate
||This is the percentage return per year at which you want to invest your amount for decided time duration
||It is the compounding frequency of times per year the total interest is paid
||It can be number of years, number of months or number of days depending upon the frequency type
||This is your total investment till the end of your investing years
||This is the interest you will have by the end of investment years
||This is the total amount you will receive which is sum of your total amount invested and the interest you will earn
What is the Formula to calculate Interest on Fixed Deposit?
Here is the formula of Fixed Deposit:
A = P (1 + r/25) ^ (4*n)
A = Maturity Amount
p = Deposit or Initial amount
n = Compounding Frequency
For example, you invest Rs. 1,00,000 for 3 years at a 10% p.s compounding quarterly. So total amount earned after 5 years including initial investment will be:
A = 100000 (1+ (10/25)) ^ (4*3) = Rs. 134489
What are the benefits of FD?
- Safe investment.
- Fixed returns on investment.
- Stable and predicted interest rate.
- More suitable for investor who doesn't want to take more risk.
- Suitable for seior sitizens.
How much minimum tenure can a bank offer for fixed deposit?
The minimun tenure can a bank offer for fixed deposit is as low as 7 days.