A Fixed Deposit (FD) is a financial instrument provided by banks or non-banking financial companies (NBFCs) which offers investors a higher rate of return than a regular savings account, until the given maturity date. It is considered one of the safest investment avenues for preserving capital while earning a predictable income.
How the FD Calculator Works
This tool uses the compound interest formula to determine the final value of your investment. Unlike simple interest, compound interest calculates returns on both the initial principal and the accumulated earnings from previous periods.
The Mathematical Formula
The maturity amount is calculated using the following formula:
A = P (1 + r/n)^(nt)
A: Total Maturity Value
P: Principal Deposit Amount
r: Annual Percentage Rate (as a decimal)
n: Number of times earnings are compounded per year
t: Total duration of the investment in years
Compounding Frequencies Explained
The frequency at which your earnings are added back to the principal significantly impacts the final payout. The more frequent the compounding, the higher the total yield.
Frequency
Compounding Periods per Year
Monthly
12
Quarterly
4
Half-Yearly
2
Yearly
1
Example Calculation
Suppose you deposit 10,000 for a duration of 2 years at a yearly rate of 7%, with quarterly compounding:
Guaranteed Returns: Unlike stock market investments, the rate is fixed at the time of deposit.
Liquidity: Most FDs allow for premature withdrawal (though a small penalty may apply).
Tax Benefits: Specific "Tax-Saving FDs" can help reduce taxable income under various local laws.
Flexibility: You can choose tenures ranging from 7 days to 10 years depending on your financial goals.
function calculateFD() {
var p = parseFloat(document.getElementById("fd_principal").value);
var r = parseFloat(document.getElementById("fd_rate").value);
var y = parseFloat(document.getElementById("fd_years").value) || 0;
var m = parseFloat(document.getElementById("fd_months").value) || 0;
var n = parseInt(document.getElementById("fd_compounding").value);
if (isNaN(p) || p <= 0) {
alert("Please enter a valid deposit amount.");
return;
}
if (isNaN(r) || r < 0) {
alert("Please enter a valid yearly rate.");
return;
}
// Total time in years
var t = y + (m / 12);
if (t <= 0) {
alert("Please enter a valid duration.");
return;
}
// Rate as decimal
var rateDecimal = r / 100;
// A = P(1 + r/n)^(nt)
var maturityAmount = p * Math.pow((1 + (rateDecimal / n)), (n * t));
var totalInterest = maturityAmount – p;
// Display Results
document.getElementById("res_principal").innerText = p.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("res_interest").innerText = totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("res_total").innerText = maturityAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("fd_results_box").style.display = "block";
}