How to Use Online Fixed Deposit Calculators to Calculate FD Returns

Check your  Fixed Deposit (FD) returns quickly and plan your investments in a better way with the help of online Fixed Deposit Calculators. A Fixed Deposit (FD) Calculator is designed to help you calculate your FD maturity amount in a hassle-free way

It simplifies the process of calculating the maturity amount, taking into account the prevailing interest rates and the tenure of the deposit. Let's understand how FD calculators work and how you can use them to calculate FD returns.

How Does a Fixed Deposit Calculator Work?

An FD calculator functions by using specific formulas to compute the maturity amount based on the details you provide. Here’s how it works:

1. Input Data

Enter the principal amount (the initial sum you deposit), the interest rate, interest pay-out mode (monthly, quarterly or at maturity) and the tenure (the duration for which the deposit will be held) into the calculator.

2. Calculation Process

The calculator applies either the simple interest or compound interest formula to compute the maturity amount. 

3. Results Displayed

The tool shows you the maturity amount (including the interest earned) that you will receive.

Components of the FD Calculator:

• Principal (P): The amount you deposit initially.
• Interest Rate (r or i): The annual interest rate.
• Tenure (t): The duration for which the money will be invested, typically in years

Example of How Fixed Deposit Calculators Work

Let’s look at an example on how the FD Calculator works:

1. Simple Interest FD Calculation:

• Principal: ₹1,00,000
• Interest Rate: 10% per annum
• Tenure: 5 years

Formula for simple interest: M = P + (P × r × t / 100); where M = maturity amount, r = rate of interest and t = Tenure.

Calculation: M = ₹1,00,000 + (₹1,00,000 × 10% × 5 / 100) 
= ₹1,00,000 + ₹50,000 
= ₹1,50,000

So the maturity amount is ₹1,50,000 and the interest earned is ₹50,000.

2. Compound Interest FD Calculation

• Principal: ₹1,00,000
• Interest Rate: 10% per annum
• Tenure: 5 years

Formula for compound interest: 
M = P × (1 + i/100)^t

Calculation:

M = ₹1,00,000 × (1 + 10/100)^5 
= ₹1,00,000 × 1.1^5 
= ₹1,00,000 × 1.61051 
= ₹1,61,051

So the maturity amount with compound interest is ₹1,61,051.

In this example, you can see the compound interest FD amounts to a higher maturity value compared to simple interest. You can use Ujjivan SFB Fixed Deposit Calculate to check returns on your FD investments.

Point to Note: Simple interest calculation is generally used for FDs having a deposit tenure of less than 6 months. For other tenures, compound interest calculation is used. Additionally, for non-cumulative FDs where interest pay-outs happen monthly or quarterly, the interest applicable could be lower compared to cumulative FDs where interest pay-out happens at the time of maturity. 

Disclaimer: The above example is for illustration purposes only. Ujjivan SFB does not take any responsibility on the accuracy of the information provided.

Benefits of Using Fixed Deposit Calculators

1. Instant Results

It automates complex calculations that involve multiple variables, making the process quick and effortless.

2. Comparative Analysis

You can compare returns with different interest rates and tenures. This may help you plan your investments better. 

3. Informed Decisions

Helps you make well-informed choices regarding your investment tenures and renewal options.