Investing your hard-earned money wisely is required to ensure a safe future. One of the safest investment options available in India is a Fixed Deposit (FD). This option gives guaranteed returns and assists you in accumulating your savings step by step over time.
But before you create an FD account, it is required to understand how much interest you will receive and what the maturity value is. This is when a Fixed Deposit Calculator can come in handy.
What is a Fixed Deposit calculator?
An FD calculator is a web-based tool that assists you in finding the interest and maturity value of your FD. Rather than doing the math yourself, this tool does it for you instantly. You simply have to fill in a few details, and it gives you an exact idea about your returns.
How does a Fixed Deposit calculator work?
A Fixed Deposit calculator employs a basic formula to compute interest on:
- Principal amount – Funds you wish to invest in the Fixed Deposit.
- Tenure – Duration for which you wish to keep the deposit (in months or years).
- Interest rate – Interest rate provided by the bank.
- Interest calculation type – Simple interest or compound interest.
Once you put in this information, the calculator will display the following for you immediately:
- The amount of interest you will receive.
- The maturity amount you will receive.
Benefits of using a Fixed Deposit calculator
A Fixed Deposit calculator helps with investment planning in the following ways:
1. Prompt and Accurate Delivery of Results
Calculating FD interest manually is confusing, especially for compound interest. This device instantly gives you results that are very accurate and practically no effort.
2. Comparison of Different FD Plans
You can enter different amounts, tenure and interest rates to compare many FD options. In this manner, you can select the most appropriate plan for your needs.
3. Convenience for Financial Planning
Knowledge of maturity helps you plan future expenses for education, marriage, or even retirement.
4. Time and Effort Saver
Rather than going to the bank to get the calculations, an individual uses their calculator anywhere and anytime in seconds.
How to use a Fixed Deposit calculator?
Operating a Fixed Deposit calculator is very simple. Just go through the following steps:
- Open the FD calculator on the bank’s website.
- Put in the principal amount you intend to invest.
- Choose the tenure (months or years).
- Select the type of FD (ordinary or senior citizen).
- The interest rate will be filled in automatically.
- Click on ‘Calculate’ to get the result.
The calculator will reflect the earned interest and the total amount you will be receiving at maturity in no time.
Why use an online FD calculator instead of a manual calculation?
Manual calculations can lead to errors, while online calculators guarantee accuracy. Thus, it is wise to use FD calculators for instant and accurate results.
Instant results are obtained here, which saves your time, as opposed to going through some formula or visiting your bank’s branch. Moreover, it’s simple to use: and requires no financial knowledge.
Factors that affect your FD returns
Factors that determine the returns on FD include:
- Interest Rates: The higher the interest rates, the better the returns;
- Tenure: Long tenures usually have higher interest rates;
- Time of withdrawal: The more you choose not to withdraw, the compound interest. That is better;
- Type of FD: Usually gives better interest rates.
Wrapping up
A Fixed Deposit calculator is a basic need for any individual intending to invest in Fixed Deposits. It provides accurate returns, allowing one to make wise decisions and implement sound financial planning. Start using this calculator today and step towards smart financial planning!
