The FCNR Calculator is designed to assist NRIs in calculating the potential returns on their foreign currency deposits. By inputting basic information such as the deposit amount, interest rate, compounding frequency, and tenure, users can estimate the maturity amount, providing clarity and aiding in financial decision-making.
Formula of FCNR Calculator
To calculate the maturity amount of an FCNR deposit, the following formula is used:
Where:
- P is the principal amount (initial deposit)
- r is the annual interest rate (expresse in decimal form)
- n is the number of times interest is compound per year
- t is the time the money is invested for in years
This formula helps determine how much one will earn from their FCNR deposits after a certain period.
Table for General Terms and Common Conversions
| Term | Definition |
|---|---|
| Principal (P) | Initial amount deposited |
| Interest Rate (r) | Yearly rate at which investment grows |
| Compounding (n) | Frequency of interest application (e.g., annually) |
| Tenure (t) | Duration of the investment in years |
This table serves as a quick reference to understand common financial terms associated with FCNR deposits.
Example of FCNR Calculator
Consider an FCNR deposit with the following details:
- Principal (P): USD 10,000
- Annual Interest Rate (r): 3.5% (or 0.035 in decimal)
- Compounding (n): Annually (1 time per year)
- Tenure (t): 5 years
Using the formula:
Maturity Amount = 10,000 * (1 + (0.035 / 1)) ^ (1 * 5) = USD 11,866.48
This example illustrates how the FCNR calculator can be use to estimate the growth of your investment.
Most Common FAQs
A1: FCNR accounts can be open in major foreign currencies, including USD, GBP, EUR, and others.
A2: The minimum deposit varies by bank but typically ranges from USD 1,000 to USD 5,000.
A3: Yes, the interest earned on FCNR deposits is exempt from taxation in India.