IDBI FD Calculator
The IDBI Fixed Deposit calculator is a valuable online tool that helps you determine the maturity amount of your fixed deposit. It considers the principal amount, tenure, and interest rate to calculate the interest earned and the final maturity amount. The FD calculator lets you plan your investments better and make informed decisions.
Fixed deposit (FD) is a common financial instrument, offered by many banks and non-banking financial companies (NBFCs). It is also called a ‘term deposit’. Customers can invest a specific amount of money through an FD for a specific amount of time at a specific interest rate. You will receive your sum and the compounded interest at the end of the fixed time.
Usually, banks allow you to open two types of fixed deposits - non-cumulative and cumulative FDs. A non-cumulative FD is the type of investment that provides you with the flexibility of earning a regular interest payout. Interest on non-cumulative FD is typically paid on a monthly, quarterly, half-yearly, or annually.
A cumulative FD is one in which the interest is compounded and paid with the deposit at the time of maturity. It is an ideal investment option for people looking to build a corpus as opposed to earning regular interest payments.
How Does The IDBI Fixed Deposit Calculator Work?
This is the formula used by the calculator to calculate the maturity for non-cumulative fixed deposits.
Where,
M is the Maturity amount
P is the Principal amount that you deposit
r is the rate of interest per annum
t is the tenure in years
This is the formula used by the calculator to calculate the interest for cumulative fixed deposits.
Where,
M is the Maturity amount
P is the Principal amount that you deposit
r is the rate of interest per annum
n is the number of times the amount is compounded
t is the tenure in years
Example:
Ms. Tara wishes to invest ₹8.3 lakhs in a fixed deposit scheme, offering an interest rate of 7.5% per annum. The tenure of the FD is 9 years. She wishes to receive her interest income every three months. By using the formula, we get:
M = P + (P x t x r / 100)
M = 8,30,000 + (8,30,000 x 9 x 7.5/100)
M = 8,30,000 + (8,30,000 x 9 x 0.075)
M = 8,30,000 + 5,60,250
M = ₹13,90,250
Interest = 13,90,250 - 8,30,000
Interest = ₹5,60,250
Interest payable every three months = 5,60,250 / 36 = ₹15,562.5
So, if Ms. Tara puts ₹8.3 lakhs in a fixed deposit that provides an interest rate of 7.5% per annum for 9 years, she will earn an interest of ₹15,562.50 every three months. She will receive her principal amount of ₹8.3 lakhs at the end of the tenure.
Using the same example, Ms. Tara is now putting the money in a cumulative fixed deposit. Here’s how much she will be making as the maturity amount.
M = P (1 + r/n) ^ (n x t)
M = 8,30,000 (1 + 0.075)^(1 x 9)
M = 8,30,000 x (1.075)^9
M = 8,30,000 x 1.9172386624788
M = ₹15,91,308 (approximately).
So, if Ms. Tara invests ₹8.3 lakhs in a cumulative fixed deposit that earns her an interest of 7.5% per annum for 9 years, she would earn a maturity amount of around ₹15.91 lakhs.
How To Use The IDBI Fixed Deposit Calculator?
A fixed deposit calculator is simple and convenient to use. Here’s a step-by-step guide:
- Select the payout option.
- Enter the principal amount you wish to invest.
- Mention the tenure of the FD.
- Key in the interest rate provided by the bank.
The FD calculator will now display the maturity amount and interest earned.
Benefits Of Using The IDBI Fixed Deposit Calculator
Using a fixed deposit calculator provides many benefits, including:
- The FD calculator ensures accurate calculations, avoiding the chances of errors or discrepancies.
- The calculator saves you the effort of manual calculations, offering instant results.
- The calculator can help you plan your investments and allow you to understand the expected returns.
- The calculator can help you compare different investment options by adjusting the principal amount, tenure, and interest rate.