What will be the amount when RS 10000 is deposited in a bank at 10% per annum compounded annually for 2 years?

What is a Fixed Deposit?

A fixed deposit (FD) is a financial instrument that majorly all banks and non-banking financial companies (NBFC) provide. Under a fixed deposit comes with a flexible duration, guaranteed, and predetermined rate of interest. Irrespective of the market fluctuations you will always earn the predetermined interest on your FD investment. You can invest for a tenure ranging from 7 days to 10 years. The more the deposit amount for a longer period, the higher will be the applicable interest rate and interest earned due to the power of compounding.

What is the FD Calculator?

The fixed deposit calculator helps an investor estimate the FD maturity amount for a fixed tenure. With the use of an FD calculator, you can estimate the interest income before making an investment. The FD calculator takes the investment amount, prevailing interest rate, and tenure as an input. It provides the wealth gained and maturity amount as the output. 

The fixed deposit calculator only provides an estimation of wealth gained and does not provide any assurance or claim the value estimated based on the inputs provided. You can use Scripbox’s simple and easy-to-use online calculator to estimate the maturity of FD.

How to use Scripbox’s Fixed Deposit FD Calculator?

It is very important for an investor to know the expected amount in advance and before making the investment. This will ensure whether the selected investment option will serve the financial goal of the investor at the maturity or not.

Scripbox’s online fixed deposit calculator is available on our website. Calculate the return and interest on your fixed deposit on the maturity of the fixed deposit with our FD calculator. The Scripbox’s FD calculator provides 2 approaches to estimating the wealth and maturity i.e. ‘Investment Amount’ and ‘Target Amount’

Investment Amount Approach

You need to follow the following steps to get the maturity amount and an estimate of interest earning:

1. Firstly enter the investment amount
2. Now, enter the investment duration in years or months
3. Provide the rate of interest
4. Select the compounding period i.e. monthly, quarterly, half-yearly, or yearly. The compounding period is the payout tenure of the fixed deposit. The interest in FD depends and varies with the compounding period hence select this field appropriately. 
5. Fixed deposit amount

 On the basis of the above details provided the online FD calculator calculates the following

• Total initial investment
• The wealth gained
• The maturity value

Target Amount Approach

By using the target amount approach you can estimate the investment amount you need to achieve the target maturity amount and the wealth i.e interest. All you need to do is provide the details of your investment goal as mentioned in the following steps:

1. Firstly, provide the target maturity amount
2. Now, enter the investment duration in years or months
3. Enter the rate of interest on fixed deposit
4. Select the compounding period i.e. monthly, quarterly, half-yearly, or yearly. The compounding period is the payout tenure of the fixed deposit. Since the interest earned on FD depends on the compounding period you must select this field appropriately. 

On the basis of the above details, the online FD calculator will provide you with how much you need to invest to receive the desired maturity amount. It also estimates the interest-earning on the investment amount.  

You can also refer to the Fixed Deposit Investment Graph. This graph provides a visualisation of the maturity amount and the wealth gained at the end of the tenure of investment. You can also download the investment report to get a detailed view of the periodic payout at monthly/ quarterly/ half-yearly/ yearly. The report will provide you with the opening balance, interest earned, and closing balance at the end of each payout period. 

Why should you use Scripbox’s FD Calculator?

Investing in any scheme is a decision that you must make only after a thorough analysis and research. The investment scheme must fulfill your investment objectives. You must use a calculator to know whether the investment scheme fulfills your investment goals or not. This way you will not only make a well-informed decision but also save yourself from any disappointments and surprises. Once you have the financial goal in his mind, he can also decide on which investment option to select

Well, Scripbox provides a simple yet effective online FD calculator to help you in your investment decision. 

• A fixed deposit calculator helps you in comparing the various fixed deposits offered by different banks. Since each bank and NBFC provide different interest rates a comparison will help you in optimizing your investment. 
• You can invest in a fixed deposit with a flexible tenure ranging from 7 days to 10 years. You can adjust the calculator to know which FD period provides you with your desired goal
• Similarly, you can adjust the compounding period of the fixed deposit i.e. the payout period. Since the FD provides compounded interest rates you must know which compounding period suits you as a payout period.  
• You can perform your calculations and analysis in 2 ways i.e. investment amount and target amount. Under the investment amount approach, you already have an investment amount in mind and you wish to know the maturity and wealth gained. While using the target amount approach you actually perform your analysis backward. Here, you know how much maturity amount you need at the end of the FD tenure and you get the amount to be invested as an output.  
• Lastly, Scripbox’s FD calculator also provides you a downloadable report. The report provides a detailed analysis of the FD wealth gained, monthly/ quarterly/ half-yearly/ yearly payout as well as maturity. Hence, you can not only estimate the total amount at the end of the tenure but also get a detailed report.
• You can also use this FD calculator to compare the wealth gained with other investment options in a similar category. For example – If Mr. Arun wants to invest a lump sum amount of Rs 1 lakh, he has a couple of investment options in place like fixed deposit, debt mutual fund, PPF. He can use Scripbox’s fixed deposit interest calculator along with a debt mutual fund calculator and PPF calculator. And once he knows the wealth expected to be gained at the maturity under each option, he can take the best-suited investment option.

Fixed Deposit Calculation Formula

The bank interest rate on the bank fixed deposit is pre-determined at the time of making the investment. Moreover, it remains constant over the period of investment. The following are a couple of factors that affect the fixed deposit interest rates:

• Firstly, the tenure of the investment is a factor driving the interest rate, the longer an investor stays invested higher will be the interest rate
• The rate of interest is higher for a senior citizen that ranges from 0.25% to 0.75% over the normal rate of interest. This excess interest is called a preferential interest rate. The age to be considered for determining a senior citizen differs from one bank to another bank. Few of them consider 60 years while others consider 55 years or so.
• The existing economic condition is also a direct determining factor. The financial institutions as well as banks consider economic conditions including repo rate, inflation rate to determine interest rates
• Lastly, the interest on fixed deposit can be calculated by two methods, simple interest, and compound interest.

Simple Interest on Fixed Deposit

Simple interest is the interest earned on the principal amount invested at the predetermined interest rate during the investment tenure.

Formula for calculation

Simple Interest = (P * R * T)/ 100

P- Principal amount invested

R- Rate of interest (%)

T- Tenure

Example on Simple Interest

Mr. Arun invested Rs 100,000 for 10 years at an interest rate of 5% per annum.

Simple Interest = (Rs 100,000 * 5 * 10 years)/ 100 = Rs 50000

Principal amount invested is Rs 100,000

Rate of interest (%) is 5% per annum

The tenure of the investment made is 10 years

Maturity Value = Principal amount + Simple Interest

= Rs 100,000 + Rs 50,000

= Rs 150,000

Compound Interest on Fixed Deposit

Compound interest is the interest earned on the principal amount invested and the interest earned. The interest rate is raised to the number of periods (years) for which the interest will be compounded and multiplied to the principal amount invested.

Compound Interest Formula for calculation

A = P (1+r/n) ^ (n * t)

A = Maturity Amount

P = Principal amount invested

r = Rate of Interest (in decimals)

n = number of compounding in a year

t = number of years

Example on Compound Interest

Mr. Arun invested Rs 1,00,000 for 10 years at an interest rate of 5% per annum compounded quarterly

Here,

Principal amount invested is Rs 100,000

Interest Rate is 5%

Number of compounding in a year is 4 i.e. 1 every quarter

Number of years of investment is 10 years

A = 1,00,000 (1+0.05/4) ^ (4*10)

A i.e. maturity amount = Rs 1,64,361

Interest amount = Rs 1,64,361 – Rs 1,00,000 = Rs 64,361

Frequently Asked Questions

What is the maximum and minimum amount to invest in a fixed deposit?

The maximum and minimum amount to invest in a fixed deposit varies from one bank to another. However, if an investor wishes to invest above Rs 1 crore, he may ask for a customised interest rate from the bank.

What is the minimum tenure for which one can invest in fixed deposits?

The customers can choose to invest their money for a minimum period of 7 days up to a maximum tenure of 10 years.

Are there any additional benefits of investing in the case of senior citizens?

Investments done by them are offered a higher rate of returns than whatever is fixed for a regular fixed deposit.

What is the fixed deposit interest rate for senior citizens?

The rate of interest for senior citizens is higher than the interest rate for other citizens. The fixed deposit interest rate ranges from 9% to 9.5% depending on the tenure of a fixed deposit account.

Is interest earned on a fixed deposit taxable?

Yes, the interest amount on a fixed deposit is taxable at the applicable slab rates. TDS @ 10% is deducted if the interest amount is greater than Rs 10,000.

Is fixed deposit a better investment?

A fixed deposit provides interest higher than the interest on the savings account balance. So, it is better to invest in an FD than your money lying in a savings account. However, an investor must also evaluate other investment options that provide a return higher than a fixed deposit. These other investment options are debt mutual funds, tax saving mutual funds. These options provide returns higher than fixed deposits but also comes along with a market fluctuation risk.

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Calculate Fixed Deposit Interest Rates

These are the fixed deposit interest rates and tenure period provided by the top banks in 2022

How to invest in Fixed Deposits?

Investing through Scripbox is made easy and paperless. All you need to do is follow the below steps and start investing.

Set up your account

Sign up for a Fixed Deposit Account through Scripbox by way of an entirely paperless process.more...

Create your Fixed Deposit

Enter an investment amount and try different durations to preview potential returns at a glance.more...

Invest online and transfer

Invest via Card, Netbanking, or UPI instantly; once done, your Fixed Deposit will be confirmed.more...

Track your FD’s status

You can view the status of any Fixed Deposits you’ve added or created in your Scripbox account.more...

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