# Investment Calculators: How to Calculate the Maturity Value and the Returns or Yield on a 5-Year Tax Saving Fixed Deposit?

Following-up on my previous post where I illustrated through a real-world example the way to calculate the maturity value and effective yield on a five-year tax saving fixed deposit (FD), I hacked-up a simple Android-application that helps you do the same in an instant wherever you are.

Click here to download the 5-Year Tax Saving FD Calculator Android-application. If you’re adventurous enough, it’s an unsigned .apk file that you can quickly install and run on your Android-phone (I’m still figuring out other mobile platforms). Let me know if you run into any trouble â€” it should run fine on most Android environments.

Here’s a quick screenshot of the application —

Here’s a quick usage manual —

• Enter the Amount that you wish to invest in the Tax Saving FD of your choice.

• Click on the Calculate button. The Maturity Amount (of maximum interest to you) is auto-computed and shown.

• Choose the Income-Tax bracket that you come under.

• The Effective Annual Yield is auto-computed and shown.

Couple of real-world examples —

Here are two recent advertisements for 5-Year Tax Saving Fixed Deposits. In both cases, I believe that the Effective APY of 17.77% shown in the ad for a Rate of Interest equal to 9.25% is wrong. (unless I am missing something?) The results however do tally for a Rate of Interest equal to 9.75%.

Let me know if you found this application useful.

#### 6 thoughts on “Investment Calculators: How to Calculate the Maturity Value and the Returns or Yield on a 5-Year Tax Saving Fixed Deposit?”

1. Rakesh says:

@Vinaya,

I don’t have an android phone but it will be beneficial to others. Is it true 18% returns?
This will tempt people to move from MF to 5 year tax saving FD, which is more safe and your returns are guaranteed. Your views please?

2. Rakesh says:

@Nikhil,

The tax sheet is in PDF format and not excel.

3. Vinaya HS says:

@Rakesh, @raghu —

Don’t be misled by the 18% figure! :-) The way the math works is as explained in this previous post: Investment Math: How to Calculate the Returns or Yield on a 5-Year Tax-Saving Fixed Deposit?.

Taking the Canara Bank FD example —

You invest a principal of Rs 10,000 and get back Rs 15,797 at the end of 5-years. But since you also get an income tax exemption (that varies with your tax slab) on the Rs 10,000 invested the banks use this “virtual savings that you would otherwise have paid as income tax” as the principal amount. And that effectively pushes up the “effective” interest rate figures. :-)

The rate of interest is still 9.25% but the mathematics and marketing pushes everything up. :-)

4. Nikhil Shah says:

Hi Vinaya,

Yes….you are right…Rate Of Interest is still 9.25% not 18%….It is marketing idea..

Nikhil