If you know the deposit amount, the interest rate, and the tenure for your deposit, calculating the interest on a fixed deposit is quick and easy. You can always use the calculation formula to get the interest rate on any FD. However, a fixed deposit calculator can be adjusted to meet your requirement. Using a fixed deposit calculator will accelerate the process of calculating interest and allow you to complete the investment process rapidly.
A fixed deposit is an investment scheme in which you can invest your surplus money and earn great interest rates. Corporates like Shriram offer an 8.75% interest rate per annum to investors. Upon the maturity of the fixed tenure, you will get the principal amount and the interest deposited in your linked savings account. With the advancement of technology, FD calculators have become increasingly popular for determining the interest rate on a deposit of your choice.
There are two ways to calculate the FD interest rates. Read ahead to know how to calculate the interest on a fixed deposit account.
How is a Fixed Deposit Interest Rate Calculated?
One can calculate the interest rate on a fixed deposit using simple and compound interest calculations. Investors can plan their financial goals accordingly when they know the interest rate they will earn on the surplus amount. A simple formula calculates the exact interest on a fixed deposit of your choice. Read ahead to read to know the modes of calculating the interest rate:
- Simple Interest Calculation:
With simple interest calculation, only the principal amount earns interest. The method to calculate this interest is relatively easy. You need to multiply the principal, interest rate, and tenure.
The formula to calculate simple interest (SI) is “principal x rate of interest x tenure divided by 100” (P x R x T/100)
So, if you invest Rs. 10,000 at 8% interest per annum for a tenure of 5 years, here is how you can calculate:
10,000 x 8 x 5 = 4,00,000
4,00,000 divided by 100 = Rs. 4000
You will receive Rs. 4000 as interest for a 5-year deposit. Thus, the total maturity amount with the principal will be Rs. 14,000.
- Compound Interest Calculation:
Compound interest means you earn interest on both the principal amount and interest amount. Many banks and NBFCs offer compounded interest on a deposit, but it is advisable to check the interest rate offered by banks or financial institutions to get the most out of this scheme. The formula for compound interest is the same as simple interest. The only difference is that it will be calculated every year.
With the formula, if you invest Rs. 10,000 at 8% interest per annum for a tenure of 5 years, it can be calculated like this:
(P x R x T/100)
10,000 x 8 x 1 = 80,000
80,000 divided by 100 = Rs. 800
The total maturity amount with the principal amount is Rs 10,800
10,800 x 8 x 1 / 100 = 864
The total amount with the principal: Rs 11,644
Similarly, we can continue calculating the preferred tenure. Interest calculation is straightforward once you learn the formula and know the frequency of the interest payouts.
What is an FD calculator?
An FD calculator is an online tool that banks and NBFCs offer investors to calculate the interest amount in just a few clicks. It is easy to use and can give you accurate results in seconds. All you need to do is enter the amount you are depositing and choose the tenure of the deposit. The calculator will estimate the interest you can get on the deposit amount and display it according to the prevailing interest rates at the particular bank or NBFC. Shriram, one of the leading NBFCs, offers its customers an FD calculator on its website. You can easily plan your financial goals with flexible tenure and auto-renewal or auto-withdrawal features.
How to use the Shriram FD calculator?
A Shriram FD offers one of the highest interest rates, up to 8.75% per annum, including a special interest rate of 0.50% for senior citizens. Here are the steps to use the Shriram FD calculator:
1: Choose between a regular deposit or a senior citizen fixed deposit.
2: Select the investment amount from the slider or type the investment amount.
3: Select the tenure you need for your deposit.
On completing these three steps, you will see changes in the cumulative and non-cumulative charts along with the interest rates on the right-hand side. You can click on ‘Invest Now’ and book your fixed deposit with Shriram.
Calculate & Invest Now
Now that we have learned that calculating interest on a fixed deposit is simple, one can do it quickly if you have the formula ready. It becomes even easier to calculate the interest with the online FD calculator, and you can get accurate results in seconds. The results are reliable and can help you plan to achieve your financial goals. You can always use the Shriram FD calculator to invest in the best option for your financial needs.
- Calculating the interest rate on a fixed deposit is easy once you know the deposit amount and the tenure of your deposit.
- The FD calculation formula can calculate the interest of any deposit.
- One can customize a fixed deposit calculator to cater to the needs of your particular deposit.
- A fixed deposit calculator can shorten the process of calculating interest and help you invest faster.