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How To Calculate FD Interest Rates?

All Fixed Deposits earn simple interest on a lumpsum principal investment at a pre-decided interest rate for a specific duration. The interest you make does not add to the principal amount. Hence you do not earn interest on the combined amount. Deposits earning a compound interest invest a pre-decided lump sum amount at a particular interest rate for a precise tenure.

But the interest earned here is added or reinvested in the principal amount, and you start earning interest on the combined amount. The FD calculator is the most user-friendly way of calculating the interest rate. You multiply your principal amount with the fixed interest rate provided by the bank and the total tenure.

The formula used to calculate the simple interest on the deposit is SI = P x R x T/100. Here, P is the principal or your total investment, R is the interest rate, and T is the tenure of the entire amount.

An example

Once you input these values, divide them by 100 for the maturity amount. For instance, if you create a non-cumulative FD, where you withdraw the interest earned every month, worth Rs. 10,00,000 at 6% ROI for one year, your simple interest earned would be Rs. 60,000 at maturity.

Compound interest

The compound interest is earned both on the principal and interest components of your FD. The formula to calculate it is CI = P {(1+ i/100) n – 1}. Here, P is the principal amount, I is the interest rate, and N is the number of years. For example, if you created a cumulative deposit compounded annually worth Rs. 10,000 at 8% for five years, the compound interest will be 10,000 {(1+8%/100) 5 – 1}, which equals Rs. 4,693. Therefore, the total maturity amount will be Rs. 14,693.

How to calculate?

You can easily find the Fixed Deposit calculator on all finance applications. You can use the tool for all calculations anytime and anywhere. It is a free tool you can utilise at your convenience, saving time and effort.

Similarly, you also find a Recurring Account calculator to compute the estimated returns on your Recurring Deposit. No matter which deposit account you open, you receive assured returns at fixed interest rates and intervals.

Types of interest payout

It is no secret that compounded FDs earn higher returns than simple interest FDs. But simple interest FDs provide interest payouts at intervals ranging from monthly, quarterly, to half-yearly. An individual can choose any FD depending on their payout preferences.


You can auto-renew your Term Deposit with the bank monthly for the same maturity date and tenure. You also do not lose interest. Therefore, use the FD interest calculator for accurate and speedy calculations.


Creating an emergency corpus for securing one’s future is essential. Relying on traditional investments like Deposit Accounts and calculators provides a clear overview of your finances. So, open the Banking app and start your investment journey.