In this article, I talk about various formulas to calculate the fixed deposit maturity values in Excel/Google Sheet.
There are various variants of fixed deposits popular in India. They are
- Cumulative interest payment - interest is paid upon maturity.
- Short Term Deposit: Interest paid at the end of maturity without any compounding, instead simple interest is applied.
- For deposits > 180 days, interest is paid quarterly and is compounded quarterly.
- Quarterly interest payout - Interest is paid out the depositor quarterly, and at the end of the maturity, you get the original deposit amount back.
Let us take a look at them separately.
Cumulative interest payment - Short term deposit
Interest is calculated using a simple interest formula. Which is time * period * principal amount.In Excel, you can use below formula
=(interest rate in %*(period in months*365/12+remaining period in
days)/365*principal amount
Example: Rs. 15000 deposited for 5 month 21 days at 4.4% interest rate
=(4.4%*(5*365/12+21)365*15000)
Special Note: % in the above formula is important, otherwise you need to normalise the interest rate by dividing it with 100.
Example:
=(4.4/100*(5*365/12+21)365*15000)
Cumulative interest payment - Regular term deposit
TBD.You can check sample Google sheet with above calculations here.
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