One of the investments that have the comfort of a guaranteed return of principal and interest is Fixed deposit (FD), also known as time deposit scheme. In case you are wondering what a fixed deposit account and how it works, read on to know more.
A fixed deposit is one of the simplest forms of investments wherein you can deposit a lump sum amount for a fixed tenor, and earn returns pre-determined at an interest rate set on the date of the deposit.
Know your returns beforehand:
It hence becomes important to understand how your investment would pan out after a particular period of time in order to make smart financial decisions. Comprehending and undertaking such planning, fixed deposit interest calculators play an important role as an investor is able to estimate the outcome beforehand i.e. maturity amount and the wealth to be gained, meeting his financial goals.
FD interest calculators can help you in deciding how much capital is required to attain a specific maturity amount. It also helps you compare different FD plans, on the basis of the interest rates. It is a handy tool that can be used to plan your investments, and finances accordingly.
Advantages of using FD calculator :
FD maturity calculations are complex involving multiple variables. At the click of a button, a FD interest calculator is able to provide you with the accurate figures, saving a lot of time on these complex calculations. Depending on the maturity amount you need, you can use a FD calculator to select the right option.
Below are several advantages of using an FD interest calculator:
- You can get to know the exact amount you will receive at the end of the maturity period.
- Saves a lot of time on these complex calculations.
- Will help you make an informed decision with all figures at your disposal.
It is also essential to mention here that the rate of interest is differentiated in the majority of the banks on the basis of the category to which you belong. For instance, at Bajaj Finance an investor can avail upto 7.85% return on fixed deposit wherein a senior citizen is provided with an additional 0.25%.
How to use a fixed deposit interest calculator?
Using an online FD interest calculator is easy. The user-friendly interface offered by Bajaj Finance uses various parameters as per the preference of investors to calculate the interest. Follow the below steps:
Select the customer category: new, existing or senior citizen:
- Choose between various interest payout options i.e., cumulative or non-cumulative. While a cumulative fixed deposit will give you interest earnings along with the principal amount upon maturity, with a non-cumulative fixed deposit you can earn periodic interest payouts at a frequency chosen by you. The overall interest earnings in a non-cumulative FD will be less as compared to a cumulative FD.
- Next, you need to enter the investment amount which you’d like to invest. You can start a fixed deposit with a minimum amount of Rs. 25,000.
- The last step is to ascertain the term of your investment, which ranges from 12 months to 60 months in case of Bajaj Finance FD.
Once you enter these values, the calculator will automatically display the interest earnings and maturity amount you can earn. If you decide to invest online in Bajaj Finance FD, you can earn an additional interest rate benefit of 0.10% and if you are a senior citizen, you can earn an additional 0.25% interest rate.
With all the figures at your disposal, you can make an informed decision!
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story.