Home Banking What is a Fixed Deposit,Interest Rate and FD Calculator

What is a Fixed Deposit,Interest Rate and FD Calculator

by Aditi Singh
Fixed Deposits

A fixed deposit is termed as a term deposit. It is becoming very popular these days as it offers very high-interest rates with minimal risk.  For the whole period of investment, there is a fixed interest rate and thus it is considered as an extremely safe investment.

The interest rates vary from banks to banks and it also depends on the maturity period of the investment. Most of the banks ,compound the interest quarterly (every three months).  In a fixed deposit, you are not allowed to withdraw any amount before the maturity period and that’s why it has very low liquidity, but you could take a loan on very small interest rates like 1% or 2%. But in case if you do, then you will be liable to pay the penalty and, in some cases, banks reduced the interest rates. However, some banks in the market offer the facility of fixed deposit with premature withdrawal.

One must pay the taxes on interest earned during the financial year depending on their tax brackets (it is the rate at which one individual is taxed). If you fall into the category of a 30% tax bracket, then it would be better if you invest in liquid or debt funds. They give somewhat similar tax benefits with an extra benefit of indexation.  There are also some alternatives to a fixed deposit in which you can invest in for the long-term need.

Benefits and Limitations of fixed deposit

PROS

  • The fixed deposits are very safe and secure.
  • The returns are very predictable and stable.
  • It is good for conservative investors.

   CONS

  • Fixed deposits have very low liquidity.
  • When you consider inflation then the returns will become lower, actual returns are very much low.
  • It is not good for long term wealth creation or for the investors who have a high-risk appetite.

Fixed Deposit Interest Rate

All banks have different interest rates for fixed deposits. FD rates are determined by the changes in the mandatory policy of the RBI such as repo rate, base rate, credit demand, and the economic condition. Deposit tenure, the deposit amount is also the basis at which the FD rates vary from banks to banks.

                              

 

      

                                                           Fixed Deposit Interest Rates 

Banks FD Rates Tenure
SBI 4.50% – 6.40%

 

7 days to 10 years
Bajaj FinServ 4.50% – 6.40%

 

12 months to 60 months
HDFC 7.72% – 7.72%

 

12 months to 80 months
PNBE Housing Finance 8.05% – 8.45%

 

1 year to 10 years
ICICI Bank 4.00% – 6.85%

 

7 days to 10 years
Axis Bank 3.50% – 6.85%

 

7 days to 10 years
IDFC First Bank 4.00% – 7.50%

 

7 days to 10 years

 

Fixed Deposit Interest Rates Calculator

The formula to calculate FD rates is
A = P * (1+ r/n) ^ n*t

I= A-P

Where,

A= Maturity Value

P= Principal Amount

r= Rate of Interest

t= Number of years

n= compounded interest frequency

I= interest earned amount

By using FD calculator, you can find out all your interest earned at the end of the tenure.

 

 

 

 

Related Articles

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.