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# Here’s How You Can Calculate Interest On Your Fixed Deposit

Since FDs are not market-linked instruments and offer substantial returns, they garner favour with a range of investors, regardless of their risk appetite. A thing to remember here is the interest rate stated by your issuer remains unchanged throughout the tenor. Thus, you can forecast your returns at the time of making the investment. However, to do so, you must know the right formula. If you’re keen on performing the calculation manually, the formula is as follows.

A = P (1 + r/4/100) ^ (4*n) where,

A = Maturity amount

P = Deposit amount

r = Interest rate

n = Compounded interest frequency

Alternatively, you can also use an FD calculator to ascertain your returns.

Why Use an FD Calculator?

By using an FD calculator, you can eliminate any errors that may creep in when you’re calculating manually. In addition, you can view results quickly, and enter details as many times as you wish to. This helps you see how different combinations of investment amount, interest rate, payout frequency and tenor yield different results.

Here’s How To Use The Calculator

• Choose the type of fixed deposit
• Select the payout frequency if you’ve selected a fixed deposit type that offers this option
• Enter the amount that you wish to invest

Once you press ‘Submit’ the calculator will show you results in a jiffy on the basis of the issuer’s interest rate. This tool is advantageous as you can also use it to pick the best FD from amongst the various options available to you. Simply see which one offers the best returns to decide.

To enjoy high returns, consider investing in a Fixed Deposit offered by NBFCs like Bajaj Finance. These FDs have a higher rate of interest as compared to bank FDs, and this one from Bajaj Finance also has an FAAA rating by CRISIL and MAAA rating by ICRA. This means that your funds are as secure as can be. Moreover, Bajaj Finance FDs offer different interest rates to different types of customers. Here’s what you can expect.

As a new customer, when you invest Rs.1 lakh in a 36-month FD with interest payable at maturity, the interest rate for your investment is 8.75%. Therefore, your maturity amount will be Rs.1,28,614.

As an existing customer, the applicable interest rate is 9%, an additional 0.25%. As a result, your maturity amount will be Rs.1,29,503.

As a senior citizen, the applicable interest rate is 9.10%. So, your maturity amount will be Rs.1,29,860.

To know your exact returns based on the tenor and investment amount you choose, simply use the FD calculator.

Apart from the investor category, also look into special tenor schemes. For instance, the one from Bajaj Finance is for 15 months, and requires you to invest at least Rs.1 lakh. Assuming you do so, you can enjoy:

• 05% interest as a new customer, resulting in maturity proceeds of Rs.1,10,063.
• 30% interest as an existing customer, resulting in maturity proceeds of Rs.1,10,375.
• 40% interest as a senior citizen, resulting in maturity proceeds of Rs.1,10,500.

Use this information to calculate returns from your fixed deposit before you invest to have complete clarity about the yield your decision will offer.

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