PPFAS FD Calculator
The PPFAS Fixed Deposit Calculator enables you to calculate the returns and maturity amount on your fixed deposit investment within seconds. All you need to do is to enter the principal amount, annualized rate of interest, and tenure of investment and the calculator will show you the results instantly.
Fixed deposits (FDs) are considered one of the safest modes of investment. They offer guaranteed and stable returns. Investors can also avail of a loan against the fixed deposit. When you deposit your money in tax-saving fixed deposits, you can get tax benefits too.
Fixed deposits are of two types - non-cumulative fixed deposits and cumulative fixed deposits. Non-cumulative FDs are the type of fixed deposits, where the investor can choose the frequency of interest payout. In non-cumulative FDs, the interest amount remains the same and the depositor receives this interest periodically during the tenure.
Cumulative fixed deposits are instruments, where the interest gets compounded annually and the depositor receives the interest cumulatively in a lump sum manner on maturity. The benefit of cumulative FD is that the principal amount increases on a year-on-year basis while the interest amount goes up as well.
How Does The PPFAS Fixed Deposit Calculator Work?
The formula used to calculate the maturity amount for non-cumulative FDs is:
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
The formula used to calculate the maturity amount for cumulative FDs is:
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:
Mr. Xavier wants to deposit ₹5.6 lakhs for an interest rate of 7% per annum for 6 years. He wishes to get the interest income once a year. By using the formula, this is how we can calculate the maturity amount of his investment in non-cumulative FD.
M = P + (P x t x r / 100)
M = 5,60,000 + (5,60,000 x 6 x 7/100)
M = 5,60,000 + (5,60,000 x 6 x 0.07)
M = 5,60,000 + 2,35,200
M = ₹7,95,200
Interest = 7,95,200 - 5,60,000
Interest = ₹2,35,200
Interest payable every year = 2,35,200 / 6 = ₹39,200
So, if Mr. Xavier deposits ₹5.6 lakhs in a cumulative FD, earning 7% interest per annum for 6 years, he would earn ₹39,200 annually. He will receive his principal amount of ₹5.6 lakhs at the end of the tenure.
Using the same example, let’s see how much Mr. Xavier would make as his maturity amount if he deposits the amount in a cumulative FD.
M = P (1 + r/n) ^ (n x t)
M = 5,60,000 (1 + 0.07)^(1 x 6)
M = 5,60,000 x (1.07)^6
M = 5,60,000 x 1.500730351849
M = ₹8,40,408.99 (approximately)
So, if Mr. Xavier deposits ₹5.6 lakhs in a cumulative FD, which earns 7% interest per annum for 6 years, he would make a maturity amount of nearly ₹8.4 lakhs.
How To Use The PPFAS Fixed Deposit Calculator?
The fixed deposit calculator makes the complicated process of calculating the returns on FD simple and easy. Follow these steps to use the fixed deposit calculator.
- Choose whether you wish to receive a regular payout or a cumulative payout.
- Enter the amount you would like to deposit in the FD scheme.
- Mention the rate of the interest offered by the FD.
- Key in the tenure of the fixed deposit.
Once the information is entered, the calculator will show you the total investment amount, the interest earned, and the maturity value.
Benefits Of Using The PPFAS Fixed Deposit Calculator
The fixed deposit calculator helps investors with the following:
- The FD calculator can help you compare the rates of interest offered by different banks so that you can choose your FD plan accordingly.
- The calculator can help you decide on the right principal amount, which can help you meet your financial goals.
- The calculator is free to use and provides error-free results.
- The calculator can save a lot of time by giving the interest amount and maturity amount in a few seconds.