Home
Back
Interest Amount Formula:
| From: | To: |
The interest amount on a fixed deposit represents the earnings generated from the principal amount invested over a specific period at a predetermined interest rate. It is the difference between the maturity amount and the original principal.
The calculator uses the simple formula:
Where:
Explanation: This calculation shows exactly how much interest your fixed deposit has earned by subtracting your original investment from the total amount received at maturity.
Details: Calculating interest earnings helps investors understand their returns, compare different investment options, and make informed financial decisions about their savings and investments.
Tips: Enter the maturity amount and principal amount in currency units. Both values must be positive numbers with the principal typically being smaller than the maturity amount.
Q1: Is this calculation for simple or compound interest?
A: This calculator works for both simple and compound interest scenarios as it calculates the total interest earned regardless of the compounding method.
Q2: What if my interest is taxed?
A: This calculator shows the gross interest amount before taxes. You would need to subtract any applicable taxes separately to determine your net interest earnings.
Q3: Can I use this for regular savings accounts?
A: While the formula is the same, fixed deposits typically offer higher, guaranteed interest rates compared to regular savings accounts.
Q4: How often is interest typically paid on fixed deposits?
A: Interest payment frequency varies by institution - it can be paid monthly, quarterly, semi-annually, annually, or at maturity.
Q5: Are there penalties for early withdrawal?
A: Most fixed deposits have penalties for early withdrawal, which would reduce your actual interest earnings if you withdraw before maturity.