Taking Control of Your Finances: A Deep Dive into Accrued Interest Calculation on Fixed Deposits

Interest Calculation

When it comes to your initial investment phase of life, you are in for a ride that’s safe at all times. No initial investor is willing to play with his hard-earned money in the volatile stock market. They all seek a stable and steady income stream in the long run. This is where Fixed Deposits (FDs) step in which comes with a fixed tenure and even the Fixed Deposit Interest Rate is fixed here!

This funding tool gives a safe and stable manner to grow your savings with an attractive price of interest. But, the high question arises: have you ever ever been puzzled about exactly how much interest you earn on your FD, particularly whilst it’s miles about to mature? Let’s dive deep these days! 

What is accrued interest? Why does it play an important role?

As the term implies, it refers to the interest amount earned on a fixed deposit for a specific tenure, even if it hasn’t been paid out yet. It’s basically the ongoing accumulation of interest on your initial deposit (principal amount). Unlike maturity amounts, accrued interest helps you track your earnings over time. 

  • Financial Planning

Knowing this type of interest beforehand allows one to plan finances in a much more efficient manner. You can easily use this amount in your budget and use it for any kind of short-term needs. 

  • Premature Withdrawal

If by any chance you plan to withdraw your FD before the mature date, most financial institutions penalize you by deducting interest. Therefore, understanding accrued interest helps you estimate the penalty amount. 

  • Loan Applications

Some financial institutions consider this interest on your investment as part of your overall balance when evaluating loan applications. 

(Pro tip: Use a Fixed Deposit Calculator Online before investing.)

How is this calculated? A step-by-step guide.  

  1. Gather data

Firstly, gain all the necessary data, such as the principal amount, rate of interest and tenure for which you want to calculate the interest. 

  1. Convert Time Period

If the rate of interest is annual, convert the time period to years. For example, if your investment has been running for 18 months, convert it to 1.5 years.  

  1. Apply Formula

Accrued Interest (SI) = Principal Amount (P) * Interest Rate (R) * Time Period (T) / 100. Plug the data into this formula. 

  1. Calculate the interest

Lastly, simply multiply the values and divide by 100 in order to get the accrued Fixed Deposit Interest Rate

How to invest in FD in 2024 via your smartphone?

Nowadays, investing in fixed deposits is as easy as ordering pizza or french fries from your smartphone. You need an internet connection and the right application installed in it. 

Around three and a half months ago, when I was planning to invest in the same, one of my business associates told me about the Bajaj Finserv application. Believe me, it is super easy to use. 

  1. Download the app from Play Store/App Store
  2. Sign up by entering your mobile number
  3. On the home page, you’ll see the Investment Bazaar section
  4. Tap on Fixed Deposit
  5. Proceed further as per your suitability/requirements


Understanding this type of interest empowers one to make wise decisions in the financial sphere. By simply initiating to calculate fd interest for your potential returns, you can maximize your savings objectives and goals. So, what are you waiting for? Be ever ready to invest in a fixed deposit and see how your wealth multiplies with time.