Fixed deposits come with either simple interest or compound interest. Most banks offer quarterly or annual cumulative (compounded) FDs. Fixed deposits with less than 6 months of duration only offer simple interest.

Cumulative FDs benefit from the effect of compounding and generate superior returns than FDs with simple interest.

VNN Wealth’s FD Calculator offers both simple interest and compound interest calculations.

Select the interest type, input your investment amount, rate of interest, and the period unit in days, months, or years.

Upon submitting the above inputs, our FD calculator will deliver the estimated maturity amount of your FD.

The simple interest FD calculator uses the following formula-

Total value (Maturity amount)= P + (P x r x t/100)

Here,

P= Principle amount, that is your investment amount.

r= Rate of interest offered by the chosen FD

t= The tenure of your FD investment in years

For example, if you’ve invested INR. 1,00,000 at 6.5% for 3 years, then the total maturity amount would be INR. 1,19,500.

M= 100000 + (100000 x 6.5 x 3/100)

M = 1,19,500

To calculate compound interest, our FD calculator uses the below formula-

Total Value (Maturity amount)= {P [1+(r/n)]^N} - P

For example, if you’ve invested INR. 1,00,000 compounded every year at 7.25% for 3 years, then the maturity amount would be 1.23L.

Here,

P= Principle amount, that is your investment amount.

r= Rate of interest offered by the chosen FD

n= Compounding frequency per annum. The value of ‘n’ would be 4 for quarterly compounding. Since we’re calculating yearly compounding, the value of ‘n’ would be 1.

N= Total compounding frequency= n*t= compounding frequency * total tenure= 1 x 3=3

Therefore,

Total value = {100000[1+(7.25/1)]^3} - 1 = 123425.99