calculate maturity value of Policies deposits loan and Policies

calculate maturity value of Policies

calculate maturity amount of Policies deposit sbi fixed deposit maturity calculator how to calculate maturity value of Policies deposits loan and Policies excel how to calculate fixed deposit maturity amount Fixed Deposit Compound Interest Maturity value Fixed Deposit Terms

Most of us generally make fixed deposit with a Bank for a particular amount in such a way that total interest in a particular financial year does not exceed Rs.10000.00 i.e. the threshold amount above which banks are liable to deduct TDS on interest payment.

For example, on 31 may 2013, rate of interest offered by one of the Banks is 9.75%  so in laymen calculation total interest on FD of Rs.100000.00 would be Rs. 9750.00 and it appears that he would be well within the slab of less than Rs.10000.00. However due to quarterly compounding effect the total interest in the above example would be Rs.10112.00.

Since the total interest exceeds Rs.10000.00 the Bank would deduct TDS on the whole interest amount provided the depositor has not given declaration at the start of the financial year that his total income including the above interest income does not exceed the minimum threshold for tax payment. This declaration is given through form 15G/H as the case may be. We will found out the formula to calculate exact maturity of a fixed deposit in the below paragraph.

Formula to calculate maturity value of a FD (Where bank offers quarterly compounding benefits):

1. Rate/400=x
2.x+1=y
3.y*y*y*y(multiply by self no of times equal to quarters the deposit would run=z
4.z-1=a
5.a*(Principal amount)= Maturity value

Now with the above formula we will calculate the maturity value of the deposit cited in the above example.

1-9.75/400=0.024375
2-0.024375+1=1.024375
3-1.024375*1.024375*1.024375*1.024375=1.10112 (Self multiplied by 4 times as tenure is 4 qrtrs)
4-1.10112-1=.10112
5-.10112*100000=10112 (The maturity value)

Please note that some banks are calculating first interest amount till the nearest quarter end date such as 30th June or 30th Sept or 31st Dec or 31st March and applying compounding effect from that date itself. In such cases, the maturity value would differ from the above calculation. Further It is the responsibility of the concerned depositor to add the interest income on FD to his total income for calculating his tax liability irrespective of the interest amount whether it is exceeding Rs.10000.00 or not and irrespective of whether TDS is deducted by the Bank or not.