FD Calculator

Understanding Fixed Deposits (FD)

A Fixed Deposit (FD) is a financial instrument provided by banks or NBFCs which provides investors a higher rate of interest than a regular savings account, until the given maturity date. The interest can be compounded at various frequencies like monthly, quarterly, half-yearly, or yearly.

How is FD Maturity Amount Calculated?

The formula for calculating the maturity amount is based on compound interest:

A = P × (1 + r/n)^(n*t)

Where:

• A is the maturity amount.
• P is the principal amount (your investment).
• r is the annual interest rate (in decimal).
• n is the number of times that interest is compounded per year.
• t is the tenure in years.

Frequently Asked Questions

What is compounding frequency?

Compounding frequency is how often the interest is calculated and added to your principal amount. More frequent compounding (like quarterly) leads to slightly higher returns compared to less frequent compounding (like yearly) for the same interest rate.

Can I use this for bank FDs?

Yes, this calculator is perfect for calculating the maturity value for FDs offered by any bank or financial institution. Just make sure to enter the correct interest rate and compounding frequency provided by your bank.