One of the most popular financial instruments that most banks and non-banking financial companies (NBFCs) provide to their clients is the fixed deposit or FD. Due to its safety compared to equity investments, it is a popular form of investment among many risk-averse individuals.
A fixed deposit is essentially a type of investment scheme where investors make a one-time, lump-sum investment with a bank or other financial institution for a predetermined duration of time. Investors get interested in a specific percentage as a reward for depositing this lump sum.
The principal investment amount and interest that have accrued up to that point are returned by the financial institution at the conclusion of the predetermined amount of time. The returns from a fixed deposit are often guaranteed, unlike many other types of investments.
Read more: Gratuity Calculator: Calculate Payable Gratuity Online
Fixed Deposit Calculator
An investor can estimate the fixed deposit maturity amount for a specified tenure using the fixed deposit calculator. Before making an investment, one can calculate the interest income using a fixed deposit calculator. The investment amount, current interest rate, and tenure are entered into the fixed deposit calculator. The output is the amount of wealth and maturity attained.
The fixed deposit calculator merely estimates wealth gained; it makes no guarantees or claims about the value that would result from using the variables given. One can always use an online fixed deposit interest calculator to estimate the exact returns they’re expected to receive from a fixed deposit.
Additionally, compared to other investment options, fixed deposits are generally considered to be much safer.
Benefits Of Using A Fixed Deposit Calculator
When comparing interest rates among banks, using an FD calculator has several advantages that will help investors plan their investments to better achieve their long-term financial objectives.
Let’s take a quick look at some of the most prominent benefits of using a fixed deposit calculator online.
1. Simplifying Investment Calculations
It might be challenging to manually calculate the returns investors will receive on maturity across banks because it is a complex procedure that needs to take into account a lot of different factors. An FD interest calculator streamlines this procedure by fully automating it, saving time and effort compared to manually making this distinction.
2. Evaluate Associated Risks
This allows investors to analyze the profits based on their risk tolerance, as they are able to precisely estimate the returns they can expect from the FD account at maturity. Additionally, if they happen to have a low tolerance for risk, it can assist in determining the quantity and length of time necessary to achieve their particular financial objectives.
3. Save Time
An FD calculator’s automated procedure can help reduce the amount of time it takes to calculate returns overall. Additionally, users just need to provide a small number of details; the calculator will take care of the rest.
4. Comparison Across Banks And Fixed Deposit Programs
Since there are many banks offering numerous plans with various interest rates, it would take hours to manually compare multiple plans across banks. Using an FD interest calculator, one can quickly search through hundreds of plans to determine which ones align most closely with their financial objectives.
5. Helps Investors Make An Informed Decision
Any financial decisions people make should be supported by reason and data. Therefore, in order to effectively plan the investment portfolio, it is essential to have an understanding of the returns one may anticipate from a certain plan.
Additionally, one may have a clear picture of the returns on investment from the FD account and plan accordingly by diversifying the portfolio, which can help them plan any additional investments that they might need to make in order to achieve those goals.
Read more: Features & Benefits of SIP Calculator
Advantages Of Fixed Deposits
Due to the numerous benefits of fixed deposit accounts, many Indians have invested in these accounts. Following are a few fixed deposit advantages :
1. Secure investment plan
A secure investment plan is one of the most significant aspects of all FD advantages. Fixed deposits are one of the instruments that are best suited for some people if they are anticipating a guaranteed return on their investment because the rate of return on a fixed deposit is fixed and they will receive their principal amount back along with additional interest after a fixed term.
2. Low risk
One of the advantages of fixed deposits is that their interest rates are generally not impacted by market volatility, making them a less risky investment.
3. Benefits for senior citizens
Fixed deposit accounts help senior citizens more than regular citizens since they offer a high rate of interest on fixed deposits for them.
Several banks in India offer fixed deposits. Customers may deposit a lump sum payment and may choose to receive their payout monthly or after the maturity date. Investors can use the fixed deposit calculator to determine their returns and choose a fixed deposit based on monthly, quarterly, or annual returns.