How Fixed Deposit is Calculated

How is Fixed Deposit interest calculated?

Fixed deposits are often seen as reliable investment tools for preserving and growing your savings. The rate of interest on FD and frequency of interest payouts define the returns on your FD investment. These interest rates are usually higher, and they are compounded periodically.

The formula for calculation of Fixed Deposits is listed below:

A = P (1 + r/4/100) ^ (4*n) and A = P (1 + r/25)4n.

where,
A = Maturity Amount
P = Deposit Amount
n = Compounded Interest Frequency

If you would like to plan your investment by evaluating your returns beforehand, try using the online FD Calculator.

You can input the fixed deposit amount and tenor to calculate the amount receivable on maturity. It also helps you to calculate both cumulative as well as non-cumulative payouts. It is easy to use, and all you need to do is fill in details about:
 Customer Type
 Type of fixed deposit
 Fixed deposit amount
 Fixed deposit tenor

The interest amount along with the total amount will hence, be reflected. It helps you save the manual work, and you can determine the return on your investment in no time.

The FD interest and amount depend on the following factors:
• Deposit or principal amount: Higher deposit amount means higher interest.
• Deposit tenor: Longer tenor results in higher interest.
• Rate of interest: Higher percentage of interest rate yields greater interest amount.
• Type of deposit (Cumulative or Non-Cumulative): Cumulative FDs give better interest.
• Frequency of interest: Your interest can be compounded monthly, quarterly, half-yearly or annually with Bajaj Finance Fixed Deposits. However, frequent compounding of interest rates can decrease your interest amount.
• Type of customer (Senior citizen, new customer, and existing customer): Senior Citizens and existing customers get additional interest rate over regular customers.