Fixed Deposit Calculator with Yearly Compounding – Calculate FD Maturity
The Fixed Deposit Calculator with Yearly Compounding helps you accurately estimate the total maturity value and interest earned on your fixed deposit investment. With annual compounding, interest is added to the principal once a year, leading to increased returns over time.
What is Yearly Compounding in Fixed Deposits?
In a yearly compounding fixed deposit, the interest earned at the end of each year is reinvested and added to the principal. The next year’s interest is calculated on this increased amount. This compounding effect helps grow your savings faster compared to simple interest or payout-based FDs.
How FD Calculator with Yearly Compounding Works
To use the calculator, input:
- Deposit Amount – Your initial investment
- Interest Rate – Annual interest rate offered by the bank
- Tenure – Duration of the fixed deposit (in years)
The calculator will display:
- Total Maturity Amount (Principal + Interest)
- Total Interest Earned over the tenure
Formula Used
Maturity Value = P × (1 + r/100)n
Where:
- P = Principal amount
- r = Annual interest rate (%)
- n = Number of years
Example Calculation
If you invest ₹1,00,000 at 7% annual interest for 5 years:
- Maturity Amount: ₹1,40,255
- Total Interest Earned: ₹40,255
Benefits of Yearly Compounding FDs
- Higher returns due to compounding effect
- Simple to understand and calculate
- Ideal for long-term wealth creation
Taxation
Interest earned on fixed deposits is taxable under “Income from Other Sources.” TDS is applicable if interest exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year.
Conclusion
The Fixed Deposit Calculator with Yearly Compounding is a powerful tool to estimate your FD returns and plan your investments effectively. Use it to compare FD options across banks and make informed decisions.