Are you looking to invest your hard-earned cash securely and earn assured returns? If yes, a Fixed Deposit (FD) could be the one for you. FDs are among the most favoured investment schemes, particularly for those who like to play it safe rather than take risks. Before you invest, however, it is important that you understand how much exactly you will earn. This is where a fixed deposit calculator is your best buddy.
What is a Fixed Deposit?
A Fixed Deposit is a banking and non-banking financial company product where you put a one-time amount of money for a certain duration. You get interest in return at a fixed rate. The interest is normally more than that of a normal savings account.
The tenure, or the investment period, can be anything between 7 days and 10 years. The best aspect is that the rate of interest is constant over the tenure. What that implies is that your returns are sure, and FDs become perfect for investors who are conservative in nature.
Why Use a Fixed Deposit Calculator?
Calculating the ultimate maturity value of an FD by hand is confusing. This is due to the fact that most banks practice compound interest, where the interest is earned not only on the principal but also on the interest it has earned so far. The calculation may differ depending on the frequency of compounding—this renders the hand calculations very complicated and time-consuming.
A fixed deposit calculator simplifies this for you. It immediately tells you how much interest you will receive and how much the amount will be at the maturity of the FD term. It prevents mistakes and saves you time, particularly if you are a beginner who is not familiar with complex math.
How Do You Use a Fixed Deposit Calculator?
It is very easy to use a fixed deposit calculator. You just have to provide the following information:
1. Principal Amount (Deposit): The amount you are going to invest in the FD. For example, you can invest ₹50,000 or ₹2,00,000.
2. Rate of Interest: The rate at which the bank pays. Senior citizens might receive a slightly higher rate.
3. Tenure: The duration for which you wish to invest your money.
4. Frequency of Compounding: How frequently the interest is compounded on your investment—monthly, quarterly, semi-annually, or annually. The more frequently the compounding, the modest your returns will be.
After these have been filled in, the calculator will display immediately:
Total Interest Earned: The amount of interest your deposit will earn over the term.
Maturity Value: The total amount you will get at the end of the FD period, consisting of your initial principal and the interest accrued.
This is a clear indication of how much your investment will increase over the years.
Advantages of Employing a Fixed Deposit Calculator
Here's why every investor must make use of a fixed deposit calculator:
● Exact Figures: It does not have human errors resulting from manual calculations and provides you with precise figures.
● Rapid Results: No intricate formulas required. Instant results are provided by the calculator.
● Simple Comparison: You can easily compare FDs of various banks by modifying the interest rate as well as tenure. You can see which one gives you maximum returns for your investment plan.
● Planning Your Finances: It assists you in planning your goals, whether it is a down payment on a home, a family trip, or your retirement.
● Transparency: Understand beforehand how your money will increase. No shocks later!
For instance, if you are looking to accumulate ₹10,00,000 for your daughter's post-secondary education in 10 years, the calculator can assist you in calculating how much to invest now to achieve that.
Where Can You Get a Fixed Deposit Calculator?
All banks and financial institutions in India provide free online fixed deposit calculators on their websites. You can even access them on financial planning websites and mobile apps. They are easy to use and come in different Indian languages too, thus allowing them to reach a larger crowd.
Conclusion
A fixed deposit calculator is a wonderful device for anyone who wants to invest in FDs. It removes the uncertainty, provides you with clarity, and enables you to make better money choices. If you are saving for the future or simply seeking a secure location to put your money, this resource guarantees that you understand what you will get in return. So, the very next time you consider making an investment in an FD, do remember to employ a fixed deposit calculator—your initial step to maximising your earnings with confidence!
Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.