SBI FD Calculator
The SBI FD calculator is user-friendly and helps users find their maturity amount. All you need to do is type in the deposit or principal amount, the tenure or its term, and the bank’s interest rate. The calculator will use the information and show you the returns.
Fixed Deposit, commonly known as FD, is one of the most commonly availed investment options in India. FDs offer higher interest rates than a bank savings account. FDs can have a tenure ranging from 7 days to 10 years. Hence, investors use FDs to save for their short-, medium-, and long-term financial goals. You can start saving in an FD in banks or NBFCs (Non-Banking Financial Companies).
There are two common types of fixed deposits that you can choose from and they are simple interest (non-cumulative) FD and compound interest FD (cumulative). A non-cumulative FD is when the investor can select the payout frequency. The interest on a non-cumulative FD can be received every month, every quarter, every six months, or every year.
A cumulative fixed deposit allows the investor to get returns in a lump sum at maturity. In simple words, until the end of the maturity period, interest is accrued or collected. The interest earned in the year is reinvested and added to the initial invested amount.
How Does The SBI Fixed Deposit Calculator Work?
The SBI fixed deposit calculator uses the below formula for simple interest FD (non-cumulative).
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 SBI fixed deposit calculator uses the below formula for compound interest FD (cumulative).
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. Anand is planning to invest ₹1,00,000 in a non-cumulative fixed deposit. He wishes to receive his interest every year. The FD is offering him a rate of interest of 8%. He has chosen a tenure of 6 years for his FD and wishes to receive an annual payout.
M = P + (P x t x r/100)
M = 1,00,000 + (1,00,000 x 6 x 8/100)
M = 1,00,000 + 48,000
M = ₹1,48,000
Interest = 1,48,000 - 48,000
Interest = ₹48,000
Interest Payable every year = 48,200/6 = ₹8,000
So, if Mr. Anand invests ₹1,00,000 in a non-cumulative FD, earning an interest of 8% per annum for a tenure of 6 years, he would earn ₹8,000 in payout every year for 6 years and the principal amount of ₹1,00,000 at the end of the tenure.
At the same time, if Mr. Anand chooses a cumulative fixed deposit i.e. receiving his returns at the end of the maturity period, here’s how much he will be getting.
M = P (1 + r/n) ^ (n x t)
M = 1,00,000 (1 + 0.08)^(1 x 6)
M = 1,00,000 x (1.08)^6
M = 1,00,000 x 1.586743
M = ₹1,58,687.43
So, if Mr. Anand invests ₹1,00,000 in a cumulative FD, earning an interest of 8% per annum at the end of 6 years, he will be receiving a maturity amount of ₹1,58,687.43.
How To Use The SBI Fixed Deposit Calculator?
The SBI FD calculator is simple to use. You need to follow the below steps to use the calculator properly.
- In the first step, you need to choose whether you are planning to receive an annual payout or a cumulative fixed deposit.
- In the second step, enter the principal amount you wish to invest in the FD.
- The next step is to type in the interest rate that you will be receiving from your FD.
- The final step is to specify the tenure in which you wish to stay invested in the FD.
- You can choose whether you want periodic payouts or a cumulative payout.
When the details are entered into the calculator, the calculator will show you either the maturity amount or the payout amount instantly.
Benefits Of Using The SBI Fixed Deposit Calculator
There are several advantages of using an SBI FD calculator, including:
- The FD calculator is highly accurate and reliable. eliminating the need for manual calculators.
- The calculator is designed to offer quick results. This allows you to calculate the interest earned on your fixed deposit in a matter of seconds.
- The calculator can help you compare the interest rates offered by different banks and financial institutions. This helps you make informed decisions on where to invest your money.