How to Calculate the Interest rate in Fixed Deposit?

What is a Fixed Deposit?

Fixed Deposits (FDs) are a traditional investment for risk-averse investors who prefer investing in fixed deposits. It is the investment provided by the banks such as non-banking financial institutions and house financing companies. In this, depositors must deposit the lump sum over a period; in return, they would get a fixed interest rate throughout the Investment.

In fixed deposits, the interest rate provided by the FDs is much higher than the regular saving in the bank account. If the tenure is completed, the investors can withdraw their investment and decide to reinvest their money.

Reverse Bank of India has announced the new rule applicable to unclaimed matured FD accounts. The unclaimed fixed deposit account will attract the interest rate as applicable to the saving account or the contracted rate of the matured FD, whichever is lower.

calulation of the fixed rate

Who Offers the Fixed Deposit?

As the commercial banks and some NBFCs and HFCs in India fixed deposit. The investor must invest in the FDs provided by the commercial bank, NBFCs, and HFCs. They need to check the rating provided by agencies such as CRISIL to ensure that your money is safe.

Features of Fixed Deposit

The investment tenure of Fixed deposit can vary across banks, ranging from one day to another.
Return on Investment is compounded periodically, whether monthly, quarterly or annually.
The fixed deposit is slightly higher returns (0.5%) for the senior citizen.

In Fixed Deposit, one can invest in a tax-saver to save taxes under section 80C, which is quite good for the taxpayers.

A fixed deposit offers a loan against them, and if the investment gets mature, investors can reinvest for another term, and they will get a high return if they invest for a more extended period.

Advantages of Fixed Deposit

In fixed deposits, the returns are not tied to the market.

Compounded interest invests faster; investment is safe as banks and financial institutions are under the Reserve Bank of India.

How to Open a Fixed Deposit Account?

There are two ways you can open an account.


  • Log into any selected bank account.
  • Search Fixed Deposit Option.
  • Then, select the Open Fixed Deposit option.
  • Fill in the application form.
  • Upload all the required documents.
  • Transfer the amount you want to invest.


  • Visit the nearest branch of the bank or any financial institution.
  • Fill in the offline application form.
  • Attach the requested documents with the application and submit it.
  • And provide a check for the amount that you want to invest.

How to use an FD interest calculator?

An empty interest calculator is very useful. It automatically calculates the amount you can expect in return and the investment’s end, so you should remember the following characteristics while calculating your FD interest.

  • Total investment amount
  • FD rate of interest
  • investment tenure
  • all these functions are inbuilt into the FD interest calculator that helps me to calculate the return on investment.

How does an FD interest calculator work?

Fixed deposit calculation is of 2 types are follows:

Simple interest

A = P ( 1 + rt)


A = total amount you will receive

P = the principal you have invested

r = the rate of interest

t = the investment period

For example, if you have invested 1,00,000 for one year, add an interest rate of 6% per annum using the formula above, and the total amount will be rupee1,06,000. Your interest amount will be a – b which translates to 1,06,000 – 1,0,000 = Rs 6,000.

Compound Interest:

A = P ( 1 + r/n) nt

A = Total amount will receive

P = principal you have invested

R = the rate of interest

t = the investment period

n = frequency of compound interest.

For example, if you have invested 1,00,000 for a one-year pattern interest rate of 6% param with a compounding frequency of twice each year, Then your total amount will be 1,06,090, and the interest earned will be 6,090.


Every interest calculator helps you evaluate the returns of different factors and compare the different FD dates to choose the ideal one for yourself. FD calculator can be used for personal financing planning car other features also.

what a fixed deposit is?

Fixed deposit is an investment scheme where you can invest a sum amount With the bank or a financial institution for a specific period. Hey, in exchange for depositing the money, you will receive interest at a searching percentage. At the end of the period, the financial institution or the bank will return your principal investment amount and the interest.

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