A fixed deposit allows you to put a lump sum in your bank for a fixed tenure at an agreed interest rate. At the end of your tenure, you receive the amount you have invested plus the compound interest. Hence, they are also referred to as term deposits. A fixed deposit offers you a high-interest rate, guaranteed returns, tax benefits, and flexible tenure. You can also take a loan against a fixed deposit. It is, therefore, the best investment choice considering the overall market and economic conditions, as the investor gets reasonable interest rates and assured returns. You can use the fixed deposit interest calculator online to determine these values.
Features of Fixed Deposits
The fixed deposits are known for the benefits it offers to the investor. Here is the list of features of fixed deposits.
● The returns are assured and not at all affected due to market fluctuations.
● There is no or little risk of loss of principal.
● Fixed deposit interest rates offered by NBFCs are higher than those provided by banks.
● FDs can be easily renewed.
● FDs offer loans against FDs up to 75% of the deposited amount.
● You can go for periodic interest payouts to manage monthly interest.
● A higher FD interest rate is offered to senior citizens.
What is a Fixed Deposit Interest Calculator?
A fixed deposit interest calculator can determine the interest and amount accrued at maturity. Calculating the maturity amount of a FD can be a complicated and time-consuming task; therefore, with an online fixed deposit interest calculator, you can quickly figure out the interest earned on these investments. The amount you deposit in it is locked for a particular period which can vary between 7 days and ten years. Since calculating the maturity amount of an FD can be a big and exhausting task, let’s understand how a fixed deposit interest calculator can help us without breaking a sweat:
1. Fixed deposit maturity calculations are complicated, involving multiple variables; a fixed deposit interest calculator does all the hard work and provides you with the exact figures in no time.
2. Since these calculations are complex and time taking, the SIP calculator online saves you time on these calculations.
3. A fixed deposit interest calculator allows you to compare the amount at the end of your tenure and the interest rates of fixed deposits offered by different financial institutions. This will help you make a wise decision when you have all the figures in your hand.
Formula to Determine FD Maturity Amount
There are two types of FD, simple interest FD and compound interest FD. Therefore we have calculators for both types of FDs. So take a look at both and use the one according to your fixed deposits.
● FD calculator for simple interest fixed deposit uses this formula.
M=P + (P x r x t/100)
Here –
P is the principal amount that is deposited
R is referred to the rate of interest per annum
T is referred to the tenure in years
● FD calculator for compound interest, FD return calculator uses this formula.
M=P+P {(1 + i/100) t – 1}
Here-
P is the principal amount
I is referred to the interest per period
T is referred to the tenure
Why Should You Use an FD Calculator
Using a fixed deposit interest calculator is extremely crucial. Do you wonder why? Keep scrolling through to know the details:
● You will get the exact amount you will be eligible for at the end of your maturity period of the fixed deposit, and with this, you can plan your future accordingly.
● The SIP calculator online is free for unlimited use for registered users.
● You can compare the maturity amount of different financial institutions easily.
● All your offerings are free and can be used as much as you want.
● It is time-saving and takes a few seconds.
● Once you understand how much your fixed deposit will fetch you at the end of your tenure, you can choose to reinvest or withdraw the amount.
Final Thought
Thus, now you must have gained an understanding of fixed deposits and why you should use a fixed deposit interest calculator. The bank will transfer the maturity amount and interest earned to the connected savings account held with them. You can choose the plans according to your requirements and budget. The choice of plans includes a traditional plan, where you can earn interest on a monthly/quarterly basis as per your convenience, with a maturity period ranging from 7 days to 10 years and a traditional plan, where you can earn interest compounded quarterly and reinvested with the principal amount with a maturity period ranging from 6 months to 10 years. Fixed deposits are best for short and medium-term investments. A fixed deposit interest calculator or a SIP calculator online can help you quickly find the interest and the amount that will accrue at maturity.
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