Fixed Deposit (FD) Calculator

How Fixed Deposit Interest is Calculated

A Fixed Deposit (FD) uses the compound interest formula, but factors in the number of times interest is calculated and added back to the principal each year (the compounding frequency). The formula used is: $M = P (1 + \frac{r}{n})^{nt}$, where $M$ is the maturity value, $P$ is the principal, $r$ is the annual interest rate, $n$ is the compounding frequency per year, and $t$ is the time period in years. The more frequent the compounding, the slightly higher the maturity value will be.