According to RBI, your deposit is secured upto Rs 5 Lakhs by Deposit Insurance and Credit Guarantee Corporation (DICGC)
A Fixed Deposit (FD) calculator is a tool that helps individuals estimate the interest earned and the maturity amount for a fixed deposit investment. The formula for calculating interest on fixed deposits is straightforward, but a calculator simplifies the process. Here’s a simplified explanation of the calculation, and you can use these steps in a calculator:
Fixed Deposit Interest Calculation Formula:
The formula to calculate interest on a fixed deposit is:
Interest = (P×r×t)/100
Where:
- P is the principal amount (initial deposit),
- r is the annual interest rate (as a decimal),
- t is the tenure in years.
Maturity Amount Calculation:
The maturity amount is calculated by adding the interest earned to the principal:
Maturity Amount = P+Interest
Steps to Use FD Calculator:
- Enter Principal Amount (P):
- Input the initial deposit or principal amount.
- Enter Annual Interest Rate (r):
- Input the annual interest rate offered by the bank or financial institution.
- Enter Tenure (t):
- Input the tenure or duration for which the fixed deposit will be held in years.
- Calculate Interest:
- Use the formula to calculate the interest earned.
- Calculate Maturity Amount:
- Add the interest to the principal to get the maturity amount.
Example:
Let’s assume you invest ₹100,000 in a fixed deposit with an annual interest rate of 5% for 3 years.
P = ₹100,000, Rate of Interest =0.05, Time = 3 years
Interest=100,000×0.05×3100=₹15,000
Maturity Amount=₹100,000+₹15,000=₹115,000
More information regarding RBI, DICGC