# Here’s How a FD Return Calculator can Help your Financial Planning

**FD return calculator** is used to calculate the maturity amount and fixed deposit interest rates on your investment. You can easily compare interest rates from various banks as per the time period. Therefore, it will be easy for you to decide which bank gives you the highest return amount for your fixed deposit.

**What Is a Fixed Deposit?**

** **A fixed deposit (FD) is a financial instrument that all banks provide. It comes with a flexible duration and guaranteed return with predetermined rate of interest. The interest rate is irrespective to the market fluctuation. You can invest for a time period ranging from 15 days to 10 years. The longer period you choose, the higher interest rate you earn.

**What Is The FD Return Calculator?**

The fixed deposit calculator is used to estimate the FD maturity amount. By using FD return calculator, you can estimate the maturity income before investing in fixed deposit. So, it is also known as a maturity calculator. As an input, the calculator uses the investment amount, tenure and prevailing interest rate. As an output, it provides maturity amount and wealth gained.

So, before you invest in a fixed deposit, always use online FD Return Calculator to estimate your earning ahead of time, it will allow you to make an instructed financial decision.

**How To Use FD Return Calculator?**

The interest rate of bank is pre-determined at the time of making the investment and it remains constant over the investment time period. Moreover, the rate of interest is higher than the normal rate for a senior citizen. The age consideration to determine a senior citizen can be different for different banks.

Usually, there are two methods for calculating the return amount on fixed deposit.

- Simple Interest
- Compound Interest

**Simple Interest Formula:**

Simple interest is the interest earned on the invested amount during the investment tenure at the pre-determined interest rate.

It can be calculated by following formula:

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

Where,

P = Principal amount invested

R = Rate of interest (%)

T = Tenure

**Compound Interest Formula:**

Compound Interest is the interest earned on both the invested amount and the interest amount. It is calculated by multiplying the interest amount with the invested amount raised to the number of years, for which the interest is compounded.

It can be calculated by following formula:

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

Where,

P = Principal amount invested

r = Rate of interest (in decimal number)

n = Number of compounding in a year

t = Number of investment years

**Benefits of FD Return Calculator**

**East to Use**

If you calculate the maturity amount of your FD investment manually, it would be difficult cumbersome. But if you do the same using maturity calculator, you can easily know your maturity earning amount immediately by just entering the correct variables.

**Compare different Interest Rates**

Different banks have different interest rates on fix deposit investment. By using FD return calculator, you can compare various fix deposits and select the one that suits your financial goals and investment objectives.

**Identify Moderate Interest Rate**

The FD return calculator helps you to identify moderate interest rates across various FD plans. By acknowledging current market rates, you can make an informed decision regarding your fixed deposit investment.

**Easy Online Process **

You can use the maturity calculator anywhere by simply going through bank website. You also do not need expertise in financial calculation. Once you enter the required variables, such as, investment amount, FD time period, and interest rate, the calculation is instant and accurate.

**Tax Benefits**

The interest rate earned on FD scheme is taxable under the Income Act , 1961. If the total interest exceeds INR 10,000 in a single financial year, a TDS of 10% is deducted on the return from FD. So, it is also important to know **tax saving options for salaried** and for senior citizens before investing in FD. However, a regular bank FD does not qualify for tax deduction under Section 80C of the Income Tax Act, 1961. The minimum investment amount for a regular bank FD is INR 5,000.

**Estimate The Risk**

The FD Return Calculator allows you to know the return you will receive after a certain time period. It will reduce the risk and give you guaranteed earnings. By understanding risk, you can estimate time period and how much you should invest in order to get desired return.

**Conclusion**

If you invest in FD by making all the calculation in FD return calculator in advance, then it will help you in doing all your future financial planning accordingly. If you invest without measuring the interest rate in calculator, you may have to withdraw your investment in between of FD time period and miss out all benefits. There are many investors who are using the calculator before investing in FDs, to get the desired maturity amount in return.