According to a survey conducted by SEBI, more than 95% of individuals prefer to invest their funds in fixed deposits over any other investment options. The primary reason for the popularity of fixed deposits is the plethora of benefits it offers. However, with so many factors involved in the process, it is difficult to determine a suitable investment option.
Hence, to aid individuals in the process of investment, financial institutions have introduced Online FD monthly interest calculators. You can plan your investment strategy with such calculators.
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What is a Fixed Deposit (FD) Calculator?
A Fixed deposit calculator is a tool that helps you to calculate the maturity amount as per the interest rate and tenor offered with the FD. You can determine the amount by simply inputting the related variables.
You can determine the maturity amount that you are supposed to avail at the end of tenor by applying compound interest on the calculator on a monthly, quarterly, half-yearly or annual basis.
An online FD monthly interest calculator determines the maturity amount by taking into account various factors including the type of FD scheme, principal and the interest rate offered by the financial institution.
How to use a Fixed Deposit (FD) Calculator?
Calculating the maturity amount and the interest rate using an FD calculator is quite straightforward. You will have to visit the official website of the financer offering the specific calculator.
You must follow the steps mentioned below to determine the FD interest rate and maturity amount.
l Step 1 – After you are redirected to the FD monthly interest calculator page, you are required to select the customer type from the options available. The options that you can find are usually “New Customer’, “Existing Customer” and “Senior Citizen.”
NBFC’s Like Bajaj Finance offers Fixed Deposits with an attractive rate of returns for senior citizens. It is a top investment scheme for senior citizens to ensure financial stability.
l Step 2 – Select the type of FD you want. It can be either cumulative or non-cumulative.
l Step 3 – You will have to select the investment amount.
l Step 4 – Select the tenor of deposits you want according to your requirements.
l Step 5 – You must click on the calculate option.
After selecting the required options, interest rates that can be earned will be disclosed. Along with that, you will also get to determine the maturity amount that you are supposed to earn during this period.
Benefits of using an FD calculator
Here are a few benefits of using an FD monthly interest calculator –
- An FD calculator helps easily calculate the multiple variables and returns generated as per the variables including varying interest rates, tenors, withdrawals, etc.
- Financial institutions offer a wide range of tenor options on fixed deposits. By using an online calculator, an investor can gain a proper idea of how an investment will grow throughout the tenor, and they can select the suitable one for them accordingly.
- A fixed deposit calculator helps an investor determine the minimum and maximum amount that a financial institution allows investing. Also, you can see the interest rates and maturity amount depending on the investment made.
- It also allows you to tally between various options. For instance, you can compare various options to select the ideal one for you.
For instance, you can opt for a cumulative FD to avail the total amount as a lump sum after maturity. Also, you can opt for a non-cumulative FD to avail the amount in fixed intervals. The returns in case of cumulative investments will be higher.
External factors that can affect FD interest rate
Fixed deposits are currently one of the best investment options in India owing to the plethora of benefits it provides. One such benefit is the fixed rate of interest that it offers. However, that can change at the time of maturity or renewals depending on the norms of a concerned financial institution and changes made by regulatory authorities determining the interest rates offered with the FD.
Here are a few factors that can affect the returns in case of an FD –
- Reserve Bank of India rates.
These above mentioned points should provide you with a clear idea regarding a fixed deposit calculator and how it works. If you are looking to make the most of such investments, opt for a financial institution that offers the highest FD rates in India.