MAM
How to Calculate Fixed Deposit Interest Rate
Fixed Deposits (FDs) are among the most popular ways to save and invest money. FDs offer better interest rates than savings accounts and keep your capital secure. Moreover, the interest earnings are predetermined based on the interest rates that the FD offers, which remain constant throughout the FD tenure. But how exactly is the interest on your FD calculated? Let us try and understand the FD interest calculation process in this article.
Fixed deposit interest rates
A fixed deposit allows you to deposit a specific amount of money for a fixed period with a bank. In return, the bank pays a specific rate of interest on your capital. The interest rates on FDs are generally higher than regular savings accounts. Banks set their FD interest rates based on several factors, including the Reserve Bank of India’s policies, the bank’s need for funds, and the overall economic conditions. Most banks offer higher interest rates for longer deposit periods. For example, a five-year FD might give you a higher interest rate than a one-year FD.
Calculating interest on fixed deposits
For fixed deposits with a tenure of up to one year, the simple interest formula can be applied, where:
Interest = Principal x Rate x Time
Here, the principal is your capital amount, the rate is the annual interest rate, and time is the number of years.
For example, if you invest ₹1,00,000 for one year at 7% interest:
Interest = 1,00,000 x 7/100 x 1
= ₹7,000
Calculating compound interest
For fixed deposits longer than a year, banks use compound interest. This means the interest earned is added to your principal at regular intervals, and subsequently you earn interest on this increased amount.
The formula for compound interest is more complex:
A = P(1 + r/n)(nt)
Where:
A = Final amount
P = Principal amount
r = Annual interest rate
n = Number of times interest is compounded per year
t = Number of years
Banks may choose to compound the interest monthly, quarterly, half-yearly, or yearly. More frequent compounding leads to slightly higher returns. For instance, monthly compounding on an FD will give you more interest than yearly compounding at the same interest rate.
If you’re confused about how this complex formula works, then you can simply use an online fixed deposit calculator to determine the interest earnings on your fixed deposit account by just inputting the capital, interest rate, and tenure.
If you wish to start investing in an FD, you can consider opening an online fixed deposit account with IndusInd Bank. Some of the salient features of IndusInd Bank Fixed Deposits include:
● Online FD account opening with instant online KYC
● Competitive interest rates for higher returns
● Easy to manage and operate FD through the IndusMobile app
● Flexible tenures and multiple interest payment options to choose from
To conclude
Understanding how FD interest is calculated can help you make informed investment decisions. While the calculations may seem complex, the basic principle is simple: the longer you invest your capital and the higher the rate of interest, the more your money grows. However, make sure to compare rates from different banks, consider the compounding frequency, and factor in taxes when choosing your FD investments.
Brands
Ekart expands IKEA partnership with EV deliveries in Chennai
3PL to handle 600 plus products with 48 hour delivery via EV fleet.
MUMBAI: Flatpacks are going electric and your sofa might now arrive with a smaller carbon footprint. Ekart has expanded its partnership with IKEA to power last-mile deliveries in Chennai, doubling down on speed, scale and sustainability in one of India’s key urban markets. Under the collaboration, Ekart will manage end-to-end large-format deliveries for IKEA across the city using a 100 per cent dedicated electric vehicle fleet. The move makes Chennai the second major market after NCR-Delhi where Ekart handles IKEA’s last-mile logistics, signalling a broader rollout of EV-led supply chains.
The mandate is no small load. Ekart will oversee deliveries for over 600 products from IKEA’s catalogue, ranging from furniture to home décor—categories that demand specialised handling and precision logistics.
Backed by its technology-driven fulfilment network, Ekart is targeting deliveries within a 48-hour window, offering real-time tracking and end-to-end visibility from warehouse to doorstep. The focus is clear: faster turnarounds without compromising on control or customer experience.
The EV-first model also aligns with both companies’ sustainability goals, as urban logistics increasingly shifts towards zero-emission solutions. For IKEA, which continues to expand its omnichannel presence in India, reliable and eco-conscious last-mile delivery is becoming central to scale.
For Ekart, the partnership reinforces its positioning as an enterprise-grade logistics player in large-format commerce. The company already supports over 1,800 retail, D2C and enterprise brands, spanning last-mile delivery, part-truckload services and warehousing.
As India’s logistics ecosystem evolves, this collaboration highlights a growing trend: delivery is no longer just about distance, it’s about efficiency, experience and increasingly, emissions.
