How to Use an FD Amount Calculator: All You Need to Know
Investments are like a long-term commitment – much like raising a child or planting a tree. You can only reap the rewards of your hard work after some years. While stock market returns are hardly predictable, fixed income instruments like fixed deposits have a predetermined interest rate which can be used in an FD amount calculator. Calculating your maturities on FDs is the first step to know the exact returns and match it with your goals in future.
Investors generally are quick to dismiss interest rates without considering the effect of compounding and tenor on the returns from FD. With the use of an online FD calculator, one can check the interest rate he will earn for the specified period of time to know the exact time and even returns on investment which can be then compared to returns from other investment options.
While banks offer FD calculators, you can only determine the exact interest as applicable to you as they do not allow you to change the interest rates manually. Also, compared to bank interest rates, company FDs are currently fetching interest rates of 1-2% higher. Speaking of the reliable and credible company FDs, Bajaj Finance is one of the top rated NBFCs offering rates of 7.35% for senior citizens for five years. Your FDs enjoy a high security because of FAAA rating from CRISIL and MAAA rating from ICRA.
Using the FD Calculator
Bajaj Finance offers a free FD calculator to ascertain the interest one will earn for the specific maturity period. It offers an easy user-interface that can be set accordance to the various parameters as preferred by the investor.
Steps to use FD calculator:
- Select the customer category to which you belong, whether a new customer, existing or senior citizen. This category decides the rate of interest that is to be offered. You can earn up to 7.35% rate of interest as a senior citizen which is 0.25% extra on the normal rate of interest. Senior citizen fixed deposit scheme from Bajaj Finance offers higher interest rate as compared to regular FD rates. Those undergoing renewal of existing FDs are offered with a bonus of 0.10% extra. If you make an FD investment via online application process, you can earn an additional 0.10%.
- Choose between the cumulative and non-cumulative options and ascertain the way you want payout of interest.
- Enter the desired amount you wish to invest; with Bajaj Finance you can open FD with a lump sum of Rs. 25,000.
- Then you need to specify the maturity period which usually ranges from 12 months to 60 months.
Apart from this you can change variables of the parameters to gain insight into calculation of rate of interest.
Example: Calculating Returns with Online FD Calculator
If you were to check the returns on a lump sum and also use the FD monthly payout calculator, to know the various payouts, you will receive the following results:
Assuming you wish to invest Rs. 20 lakhs (online investment mode) for a period of five years. You will be eligible to receive 7.2% p.a. The lump sum interest earned will be Rs. 8,31,418 and the total maturity amount will be Rs. 28,31,418.
If you wish to go for periodic payouts, the calculator will provide these details –
|Period||Interest||Interest Payout (Rs.)|
Investing in Bajaj Finance FD can help you earn one of the highest FD interest rates up to 7.35%. Compound interest formula is used in the calculation of FD interest rates. It can be tedious to calculate your return on investment when you invest in a fixed deposit. Using an FD amount calculator can save you a lot of effort. Fixed deposit interest rate calculator also helps you in choosing the scheme for your fixed deposit plan. To choose the right investment plan for you, you can adjust the values of the variables such as the investment amount, tenure of investment, and frequency of periodic interest payouts.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends.