# The Ultimate Guide to Using the FD Calculator

Fixed Deposits (FD) are among the most popular instruments of saving money in India that provide good returns.

What is a Fixed Deposit?

In a Fixed Deposit, you place a lump sum at a negotiated interest rate in your bank for a specified term. You will receive the amount you invested, plus compound interest, at the end of its tenure. It offers higher interest rates than a savings account. The interest rate may vary from bank to bank. You can also calculate it by using various tools online like an FD calculator. Image Courtesy: Shutterstock

What is an FD Calculator?

An FD calculator is an online tool that lets you assess the interest rate you will gain by investing in a fixed deposit. You can easily measure FD interests by providing a few details. Online FD calculator is used by applying compound interest on a monthly, quarterly, half-yearly or annual basis to calculate the maturity number.

In determining the return value at maturity, FD calculator considers the deposit period, the form of a fixed deposit scheme, the principal investment and the interest rate provided by the bank. It is advisable to use the FD calculator before for opening a fixed deposit to know the worth of your investment.

How to Use FD Calculators to Know Monthly Interest?

You can use the FD calculator to know the fixed deposit interest rate on your own. Here are the necessary steps to calculate interest rate. If your bank offers FD calculator facility, then visit their official website and follow the steps below:

• Choose your type of customer from the given options, i.e. Existing/New Customer or Senior Citizen
• Choose your type of FD (cumulative or non-cumulative)
• Select the amount you want to invest
• Mention deposit tenure
• Click on calculate

The FD calculator will automatically suggest the indicative interest rate earned, along with the maturity amount during the specified tenure.

Factors you should consider:

To calculate interest rates on fixed deposits using the FD calculator, you should consider the following factors:

1. Deposit Amount: the amount you want to invest in a fixed deposit. You can open an FD account with a minimum of Rs. 1000.
2. Interest Rate: Interest rates can differ depending on the tenure of your fixed deposit and bank. Each bank has a distinct rate of interest.
3. Deposit Tenure:It varies as per your requirement.
4. The level of compound interest: It measures on a monthly, quarterly, semi-annual, or annual basis the maturity sum to be received after the term.

Advantages of using an FD calculator:

• FD calculators helps eliminate human errors. It estimates the approximate value of the rate of interest that you can earn over a specific tenure.
• It gives an idea of the rate of growth at which your investments can rise after they are invested in a fixed deposit portfolio. Using an FD calculator, you can compare the final returns for the same tenure and amount offered by different fixed deposits.

FD calculator is an easy and quick way to measure the interest rate you will receive on your fixed deposit investment every month. Being one of the most useful tools online, it enables you to know the maturity earnings even before opening a fixed deposit account.

You can use FD calculators provided by various reputable banks like Axis bank. They also facilitate the opening of fixed deposit accounts, if you want to do so for investment purpose. The bank also offers express FD where you can open a fixed deposit online in under a few minutes. You can checkout their services online to know more in detail.