Here is How You Can Use a Fixed Deposit Calculator

 

When it comes to investing your hard-earned money, fixed deposits can be the best place to invest in. Fixed deposit investments are considered much safer than other investment options. Investing in fixed deposits can benefit you a lot when investments are to be considered.

Fixed deposit investments involve less risk in them whereas other investment options like mutual funds and shares involve higher risk. The interest offered on fixed deposit is fixed and does not tend to change. While interest rates offered on other investments keep on changing as it depends on the market condition. As we all know market rates fluctuate which can result in a loss. Thus these investments carry risk with them.

When interest rates are considered, they play a very important role in investments. You can enjoy higher returns only when you are offered a higher rate of interest. Now not all banks will offer you the same interest rate on your fund investment. Some banks may offer you with higher rates whereas some may offer you with low-interest rates.

Interest rates often depend upon the amount you are going to invest. A small investment would get lower returns whereas a huge amount would get higher returns when invested. Some people also go for investing by splitting a lump sum amount into small parts and then investing it in different fixed deposits. By doing this you can get enjoy higher returns and also can get saved from paying tax. You have to pay tax when you earn more than INR 10,000 in one financial year just by interest returns.

The interest rates offered by banks also depend on the period of investment you are going for. If you choose a long-term investment period you may receive higher interest rates whereas going for a short-term investment will earn you low returns. You can analysis your returns by using FD interest calculator before investment.

When it comes to fixed deposit investments it’s important to calculate the fixed deposit. Fixed deposits most importantly depend on three factors. These three factors are very important if you wish to calculate your fixed deposit.

  1. Firstly the amount you are going to invest is very important. Because the amount you invest will determine the returns you will get. If the sum you are investing is high the returns will surely be high and if the sum is small the returns you get will also be less.
  2. The second most important factor is the rate of interest. The interest rate you earn is very important because that is the exact return you earn. The interest rate will tell you how much return your fund will be earning in future. As banks offer a different rate of interest on fixed deposit account, it’s important that you check the rate before going for investing your funds.

How to Use a Fixed Deposit Calculator:

It’s important that you investigate the returns you are going to get on your investment before you approach a bank. There are many interest rate calculators available online that can help you in understanding your interest returns. While calculating the fixed deposit you first need to choose what kind of a customer you are. Are you a new customer, existing loan customer or a senior citizen?

Then you need to choose the fixed deposit that you will opt for either a cumulative one or a non-cumulative one. After you have selected the type of deposit you need to enter the amount and choose the deposit tenure and the interest rate that the bank is offering you. This will thus give you an idea about the returns you will be earning on your fund invested in fixed deposit.