Finance

# How to Calculate the Maturity Amount and Interest Earned on your FD

A fixed deposit (FD) is a financial product offered by most banks and non-banking financial organisations (NBFCs). A fixed deposit has a variable length, a guaranteed interest rate, and a predetermined rate of interest. Regardless of the market volatility, your FD investment will always receive returns at a predetermined interest rate. You can invest for a period of seven days to ten years. The higher the appropriate interest rate and interest collected due to compounding, the more significant the deposit amount for a more extended period.

There are a myriad of high-yielding investment alternatives available today. On the other hand, fixed deposits have a stronghold on the market. After all, why not? It has a tenor that is variable and returns that are guaranteed. The rate of interest is determined at the time of fixed deposit booking. Furthermore, market movements have little bearing on it.

## What is the Maturity Amount?

You can use an online fixed deposit interest calculator to figure out how much money you’ll get when your investment matures. This post will show you how much your FD will be worth when it matures.

The due amount payable to the holder of a financial policy as of the maturity date is the maturity value. The maturity value of an FD is the sum of the capital invested and interest income.

Your fixed deposit’s maturity amount is estimated using a fixed deposit interest calculator. It aids in the comprehension of predicted returns on investment. The predicted returns are calculated using the principal, interest rate, and tenor in this FD interest calculator.

### FD Maturity Amount Calculation Formula

Simple interest FD and compound interest FD are the two formulas for calculating the maturity amount.

#### FD with Simple Interest

The formula for calculating simple interest FD is as follows:

P + (P x r x t/100) = M

where P is the principal amount (the money in the account) and r is the annual interest rate

The tenor is measured in years.

So, if you deposit Rs. 1 Lakh for five years at a 6.80% p.a. interest rate, your maturity value will be: 100,000 + (1,00,000 x 6.80x 5/100) = Rs. 1,34,000

#### FD with Compound Interest

The formula for calculating compound interest FD is as follows:

M = P ((1 + r/n) ^ (n x t)

where P denotes the main sum

The rate of interest each period is denoted by r.

The tenor is t, while the frequency of compounding per year is n.

To explain the above formula, we’ll use the same variables as before. The interest, on the other hand, is compounded quarterly.

1,00,000 (1 + 6.80/4) ^ (4 x 5)

= Rs. 1,40,094

### How to know your FD’s worth when it matures?

Using the fixed deposit interest calculator, you can determine how much your FD will be worth when it matures. Follow these procedures to figure out how much money you’ll have when you retire.

• Choose your customer types, such as senior citizens or non-senior citizens. It will help determine your correct interest rate as senior citizens are offered an additional 0.25% interest.
• Choose the amount you want to invest
• The tenor takes the stage.
• Choose between cumulative and non-cumulative FD schemes, and choose the payout option.

After entering the above information, the fixed deposit calculator will calculate the FD interest rate and maturity amount offered.

## The Advantages of Using an Online fixed deposit interest calculator

Using an online FD maturity amount calculator has several advantages. The following are the details.

• It displays the quantity of maturity you’re most likely to receive.
• You can use this calculator an infinite number of times to determine which FD scheme is best for you.
• You can save both time and money by eliminating time-consuming and error-prone manual calculations.