# FD Calculator Monthly Interest # FD Calculator Monthly Interest

### What is FD Calculator?

FD calculator is a tool that calculates how much you get when you invest in a fixed deposit (FD) at the time of maturity. The instrument uses inputs such as deposit amount, FD tenure and fixed deposit rate for the said tenure. The rate of interest on an FD and the frequency of interest payments define the return on your FD investment. These interest rates are usually high and are compounded from time to time. The formula for calculating fixed deposits is listed below: A = P (1 + r/4/100) ^ (4*n) and A = P (1 + r/25)4n.

### Fixed Deposit

Fixed deposit is a kind of term deposit with high interest rate (as compared to regular savings account) and high interest rate and low risk, making it a very popular investment option in India. The interest rate is fixed for the entire maturity period and is generally considered to be a very safe investment. (AAA). Interest rates vary and there is also a difference from bank to bank over the maturity period (usually a higher interest rate for a period of 1-3 years). Most banks deposit interest quarterly (every three months). Liquidity in fixed deposits is very low, and, you should not take any amount before the maturity date (though you can take a loan at a lower interest rate @ 1% or 2%). If you do, a penalty can be imposed, and the interest rate will be reduced. However, some banks (eg ICICI) offer term deposits with a premature withdrawal facility.

### How to use it

The maturity value of the deposit will depend on the amount of the investment, the period of the deposit, the interest rate, and the frequency of interest payments that may be monthly or quarterly, or cumulative deposits. You must enter the date of opening the FD, and then enter the deposit amount, which costs between Rs 500 and Rs 10 lakh. Next, choose the frequency of interest payments. Monthly and quarterly payments, reinvestments, must be entered for a period of days, months or years. The short-term duration can be between 1-31 days. Finally, enter the annual interest rate at which the fixed deposit is invested. You can use the slider to put in various fixed deposits to arrive at the final maturity value.

### What does it represent?

On presenting the above information, the calculator will show the final maturity value of the investment. The maturity date of the investment will also be shown based on the date and tenure of the deposit. In addition, a break-up of the maturity value, i.e. the amount invested, and interest earned, will be shown separately. 