This FD Interest Calculator is for Simple and Cumulative type. It helps you to estimate the returns on your fixed deposit investments in India.  This tool is also known as: FD calculator, Canara bank fixed deposit calculator, FD interest calculator, fixed deposit interest calculation, FD interest rate, FD maturity amount, cumulative FD etc. For short term or long term Deposits, this tool calculates your maturity amount and total interest earned.




How to Use the FD Interest Calculator:

1. FD Type: Select the type of fixed deposit – Simple or Cumulative.
2. Principal Amount: Enter the principal amount you plan to invest.
3. Interest Rate: Enter the annual interest rate offered on the FD.
4. Term (Duration): Specify the investment term in days, months, or years.
5. Compounding Frequency: Choose how frequently the interest is compounded (monthly, quarterly, semiannually, or annually).
6. Click Calculate: Click the “Calculate” button to instantly see your maturity amount, total interest earned, and total payout.

 

Disclaimer:

• Accuracy: This calculator provides estimates based on the information you input. Actual FD returns may vary slightly depending on the specific terms and conditions of the bank or financial institution.
• FD Rates: FD interest rates are subject to change.
• This tool is for information purpose only and it can not be treated as financial advice.

 

 

What is Interest

Interest is the cost of borrowing money—or the reward for lending it. It is usually expressed as a percentage of the principal (the original amount). Interest is the foundation of almost every financial product, from loans to savings and investments.

There are two main ways interest is calculated: simple interest and compound interest.

 

Simple Interest

Simple interest is straightforward and easy to calculate.

Example:
Derek borrows $100 for 1 year at 10% interest.

Interest = $100 × 10% = $10
Total repayment after 1 year = $110

If Derek borrows the same amount for 2 years, interest is charged on the original principal each year:

$100 + $10 (Year 1) + $10 (Year 2) = $120

Formula:
Simple Interest = Principal × Rate × Time

Although simple interest is easy to understand, it is rarely used in real-world finance.

 

Compound Interest

Compound interest means you earn interest on both the principal and previously earned interest—often described as “interest on interest.”

Example:
Derek borrows $100 for 2 years at 10%, compounded annually.

• Year 1:
  $100 × 10% = $10 → Total = $110
• Year 2:
  $110 × 10% = $11 → Total = $121

With compounding, Derek pays $121, not $120. Over time, this difference grows dramatically.

Key takeaway:
The more frequently interest is compounded (monthly, daily, or continuously), the higher the final amount.

 

The Rule of 72

The Rule of 72 is a quick mental shortcut to estimate how long it takes for money to double.

Formula:
Years to double ≈ 72 ÷ Interest Rate

Example:
At 8% interest:
72 ÷ 8 = 9 years

This rule works best for interest rates between 6% and 10%.

 

Fixed vs. Floating Interest Rates

• Fixed Rate: Stays the same throughout the loan or investment period.
• Floating Rate: Changes over time based on a reference rate (such as central bank rates).

Floating rates can benefit borrowers when rates fall—but increase risk when rates rise.

 

Contributions and Savings

Many investments allow regular contributions (monthly or yearly).
Contributions made at the beginning of a period earn more interest than those made at the end, because they have more time to compound.

 

Impact of Taxes

Interest income is often taxable, which can significantly reduce returns.

Example:
$100 invested at 6% for 20 years:

• Without tax: $320.71
• With 25% tax: $239.78

Taxes reduce the benefit of compounding by applying a cut every period.

 

Impact of Inflation

Inflation reduces purchasing power over time. Historically, inflation averages around 3% per year.

To truly grow wealth, returns must exceed both taxes and inflation. For many investors, earning a real return above 4% consistently is challenging.

 

Conclusion

Compound interest is powerful – but taxes and inflation quietly work against it. Understand how all three factors interact and make smart financial decisions for growing real wealth over time.