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FD or fixed deposit is a safe tool for investing and sustaining funds for a better financial future. FDs are also known as term deposits. In a fixed deposit, the investor is expected to invest a principal amount that grows over time at a fixed interest rate. Following the maturity of the FD, the investor receives the original investment amount plus compound interest.
An FD monthly interest calculator can be used to calculate your maturity returns. This, in turn, can help your financial planning.
Here is your ultimate guide to the FD monthly interest calculator.
What is an FD Monthly Interest Calculator?
An FD monthly interest calculator is useful for calculating interest returns on your investment. It considers the principal investment, the interest rate, and the duration of the fixed deposit. In addition, an FD monthly interest calculator is a simple tool that allows you to compare which banks offer the best interest rate on your FD maturity.
You can use an FD Interest calculator to calculate the compound interest you would earn on your investment. The duration of your term can range from 7 days to 10 years. It will ensure that you make the best investment decision possible if you have the figures in front of you.
How To Use FD Monthly Interest Calculator Online?
FD monthly interest calculator is convenient to use. Here is how you can calculate using it online –
Step 1: Search for an FD monthly interest calculator online.
Step 2: Enter your principal amount, interest rate, and tenure.
Step 3: The maturity value and interest returns will be displayed on the screen.
How is Return on FD Calculated?
An online FD monthly interest calculator works on a mathematical formula. However, it can also be calculated manually. FD monthly interest calculator gives you the figures using three main factors, namely principal amount, interest rate, and tenure of the FD. It varies for individuals, depending upon their requirements.
The formula used to calculate FD maturity value –
A = P * (1+ r/n) n*t,
A = Value of Maturity
I = A – P
P = principal sum
r = interest rate
n = compound interest rate
t = number of years
I = total interest earned
Below is an example to better understand how an FD maturity amount is calculated –
If you deposit Rs. 50,000 and hold it for three years at a quarterly 10% compounding interest rate, the interest earned at maturity is as follows:
A= 50,000 {1 + (0.1/4)} ^ (4 * 3)
A = 50,000 (1 + 0.025) ^ (12)
A = 50,000 (1.025) ^ (12)
= Rs. 67,244 (approximately)
CI = Maturity Amount – Principal Amount
CI = 67,244 – 50,000
= Rs. 17,244
Another similar saving scheme is a Recurring Deposit scheme. The only difference between RD and FD is that the former invites regular deposits. Again, you can use an RD calculator to simplify your calculations.
What is an RD Interest Calculator?
An RD interest calculator is a financial tool that calculates the returns on deposits. The calculations are complicated because interest is compounded quarterly, and numerous variables are also in play.
The interest rate on RD accounts changes with time; therefore, unlike the interest rate in an FD account, the interest rate in an RD account is not fixed.
The recurring deposit calculator can be conveniently used. Here is how you can calculate using them online –
Step 1: Google an RD interest calculator online.
Step 2: Enter the monthly instalment amount, interest rate, and investment tenure.
Step 3: The maturity value of your principal amount will be displayed on the screen.
The RD interest calculator works on the following mathematical formula.
A = P*(1+R/N)^(Nt)
‘A’ – maturity amount
‘P’ – recurring deposits monthly instalment
‘N’ – compounding variable for interest rate
‘R’ – the rate of interest of RD in percentage
‘t’ – tenure of investment
Now that you know an FD monthly interest calculator and an RD interest calculator, you can use the viable resources and make the right decision for your investment. Both are useful means of sustaining funds for your future. You can save money for various purposes, such as your dream vacation, your child’s education, or marriage, etc. Be smart with your money and invest timely.
