Fixed Deposit Calculator

Calculate the maturity amount and interest earned on your fixed deposit investment. This tool helps you plan your savings by showing how your money grows over time with compound interest.

Principal Amount ($) The initial amount you plan to invest in the fixed deposit

Annual Interest Rate (%) The annual interest rate offered by the bank or financial institution

Investment Tenure (Years) The duration for which you plan to keep the money in fixed deposit

Interest Compounding Frequency How often the interest is calculated and added to your principal

Tax Deducted at Source

Check if tax is deducted from the interest earned (10% TDS in India)

Quick Examples:

How to Use This Calculator

Enter the principal amount you plan to invest in the fixed deposit
Input the annual interest rate offered by the bank
Specify the investment tenure in years
Select the interest compounding frequency (monthly, quarterly, etc.)
Check the tax deduction option if applicable
Click Calculate to see your maturity amount and interest earned

Formula Used

M = P × (1 + r/n)^(n×t)

Where:

M = Maturity amount (final value of the investment)
P = Principal amount (initial investment)
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Time period in years

Example Calculation

Real-World Scenario:

Sarah wants to invest $10,000 in a fixed deposit for 5 years at an annual interest rate of 7%, compounded quarterly.

Given:

Principal Amount (P) = $10,000
Annual Interest Rate (r) = 7% or 0.07
Time Period (t) = 5 years
Compounding Frequency (n) = 4 (quarterly)

Calculation:

M = 10,000 × (1 + 0.07/4)^(4×5)

M = 10,000 × (1 + 0.0175)^20

M = 10,000 × (1.0175)^20

M = 10,000 × 1.4148

M = $14,148

Result: After 5 years, Sarah's investment will grow to $14,148, earning $4,148 in interest.

Why This Calculation Matters

Practical Applications

Planning for retirement savings
Setting aside funds for education expenses
Creating emergency funds with guaranteed returns
Comparing different fixed deposit options

Key Benefits

Helps make informed investment decisions
Shows the power of compound interest over time
Allows comparison between different investment options
Assists in financial planning and goal setting

Common Mistakes & Tips

The frequency of compounding significantly impacts your returns. Monthly compounding yields more than quarterly, which yields more than semi-annually. Always check the compounding frequency when comparing FD options.

Fixed deposits offer guaranteed returns, but inflation can erode the real value of your investment. Consider the inflation rate when evaluating if the interest rate is truly beneficial in the long term.

Interest earned on fixed deposits is typically taxable. In many countries, tax is deducted at source (TDS) before the interest is paid to you. This affects your actual returns and should be factored into your calculations.

Frequently Asked Questions

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any accumulated interest. Compound interest results in faster growth of your investment over time.

Generally, longer-term fixed deposits offer higher interest rates. However, this depends on your financial goals and need for liquidity. If you might need the money soon, a shorter-term FD might be better despite the lower rate.

Yes, you can typically break a fixed deposit before maturity, but this usually comes with a penalty. The bank might reduce the interest rate applicable to your deposit, which could significantly lower your returns. It's best to invest only money you won't need before the maturity date.

References & Disclaimer

Financial Disclaimer

This calculator provides estimates for educational purposes only. Actual returns may vary based on specific bank policies, changing interest rates, and other factors. Please consult with a financial advisor before making investment decisions.

References

Understanding Fixed Deposits - Investopedia guide to fixed deposit investments
Current CD Rates - Bankrate's overview of certificate of deposit rates
Tax Treatment of Interest Income - IRS guidelines on taxation of interest earnings

Accuracy Notice

This calculator assumes a constant interest rate throughout the investment period and does not account for potential rate changes, inflation, or other economic factors that may affect actual returns. Results should be used as a general guide rather than a precise prediction.

About the Author

Kumaravel Madhavan

Web developer and data researcher creating accurate, easy-to-use calculators across health, finance, education, and construction and more. Works with subject-matter experts to ensure formulas meet trusted standards like WHO, NIH, and ISO.

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finance investment-savings fixed deposit money investment tax

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