The interest payout on the FD’s maturity depends on the interest rate prorated by the bank and the frequency of payouts. The return on the principal amount invested is computed either as simple interest, whereby the interest is earned only on the principal amount, or as compound interest on the basis of which interest is compounded, i.e., interest is earned on both, the principal amount and accrued interest.
For example, if you invest Rs. 20,000 for 4 years at rate of interest 6.25% per annum. The Simple interest would be (20,000*4*6.25)/100, i.e., Rs. 5,000 to be paid to the investor as interest at the end of the investment period. Whereas, if the same investment is to be compounded annually, the interest at the end of the investment tenure would be 20,000├ {(1 + 6.25/(1*100)┤)^(1*4)-1}, i.e., Rs. 5,488.59.
In the case of compound interest, the amount payable at maturity is higher, since interest is calculated on the principal amount and interest accrued on it. Use FD Interest Calculator.
Using the FD calculator is very easy, and all you have to do, is to input the fixed deposit amount and tenor to calculate the amount receivable at maturity. It helps you calculate both – cumulative and non-cumulative payouts.
It is easy to use, and all you need to do is fill in details about:
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.
Calculating the return on your fixed deposit investment might seem tedious and off-putting when one has to deal with large numbers. But knowing the right way to estimate would allow one to have a higher pay off at the end of the tenure of the investment.
The interest payoff on FD’s maturity depends on the interest rate prorated by the bank and the frequency of payoffs. The return on the principal amount invested is computed either as simple interest, whereby the interest is earned only on the principal amount, or as compound interest on the basis of which interest is compounded, i.e., interest is earned on both, the principal amount and accrued interest.
For example, if you invest Rs. 20,000 for 4 years at rate of interest 6.25% per annum. The Simple interest would be (20,000*4*6.25)/100, i.e., Rs. 5,000 to be paid to the investor as interest at the end of the investment period. Whereas, if the same investment is made to be compounded annually, the interest at the end of the investment tenure would be , i.e., Rs. 5,488.59.
In the case of compound interest, the amount payable at maturity is higher, since interest is calculated on the principal amount and interest accrued on it.
To maximise the returns on your deposit, it is important to know the factors affecting your FD interest and amount, which have been listed below:
Based on your convenience, and the above factors, you can choose the tenors, payout frequencies, deposit types and mode of investment to grow your savings. You can choose to invest in a Bajaj Finance Fixed Deposit to get attractive rate of interest, which can enable you to maximise the returns on your deposit.
