How Is Interest Calculated On A Fixed Deposit?

Fixed Deposit (FD) interest rate depends on the amount of money you are depositing in the FD account, tenor and interest payouts frequency you choose, and customer type as well. You may find it difficult to calculate and compare FD interest rates for different tenors with different banks and NBFCs. This issue of time-taking calculations can be easily solved with online FD calculators. Before solving the calculation issues, let’s find out what the FD calculation formula is.

FD Formula

The FD formula to be used for interest calculation is elaborated below:



A = maturity amount

P = principal amount

r = rate of interest

t = number of lock-in years

n = compounded interest frequency

So, it looks like complex manual calculations. To avoid mistakes in such big calculations, it is better to use the Bajaj Finance FD calculator which is available online for free. It is a very fast calculation tool to calculate FD interest and maturity amount.

How to use FD calculator

Here are the easy steps to use the Bajaj Finance FD calculator:

Step 1: Go to> Fixed Deposit & Investments>Fixed Deposit Calculator.

Step 2: Choose the customer category

  • Customer categories include: non-senior citizen (Investing Offline), Non-senior citizen (Investing Online), and Senior citizen (Investing Offline/Online)
  • FD interest rates 2020 with Bajaj Finance ranges between 6.60 – 6.85%. The interest will vary for different categories of investors. Senior citizens will get the benefit of 0.25% on interest rates and the investor investing online will get the benefit of 0.10% over the applicable interest rate. So, choose and compare interest rates for different categories and different tenors then invest smartly to maximize your FD returns.

Step 3: Choose Investment Amount

  • Choose or enter the amount you want to deposit in the fixed deposit account. You can start Bajaj Finance FD with as low as Rs.25,000 and invest up to one crore.

Step 4: Choose Investment Tenor

  • Choose or enter the number of months for which you want to deposit your funds. It will be the lock-in period of your FD. Longer the tenor, the higher the interest rate.

It’s done. Now you will see the results on your screen automatically within a few seconds.

  • The Applicable interest rate as per your inputs
  • The Maturity date
  • The Interest payouts at maturity and periodic as well i.e. monthly, quarterly, half-yearly, annually
  • The Maturity Amount

Hope, you have understood this simple working system of online FD calculator. Now you can save your invaluable time from lengthy FD calculations. Let’s find out how you can maximize returns on fixed deposits.

Maximize Fixed Deposit Returns

  • Strategize your FDs

You need to plan your FD investment as well just like other investments. You can consider reinvesting because you will get an additional interest rate benefit on the renewal of FDs.

  • Choose Company FDs over bank FDs

NBFCs offer higher returns than banks and post offices. Consider Bajaj Finance FDs to avail higher rate of returns.

  • Choose Cumulative FD over Non-cumulative FDs

There are two types of FD interest – cumulative and non-cumulative. Choose cumulative FDs to earn cumulative interest at the maturity date to maximize returns with compound interest.

  • Multiple FDs

Do not invest all your funds in one FD. Open multiple FD accounts with different maturity dates so that you have a back up for any emergency. In case of financial needs, you will not require to break an FD with a large amount and hence your returns will not be affected.

  • Avail Tax Exemptions

Timely filing of returns is really important to avail tax exemptions. Stay updated about the latest modified taxation laws for FD returns. If your interest income is less than Rs.40,000 (Rs.50,000 for Sr. Citizens) in a financial year, you can file your returns with Forms 15H or 15G.