Financial planning is your gateway to securing a stable future. Even small investments can get substantial returns when you invest your money in the right avenues. There are multiple options for you to invest your money. Before selecting a financial instrument, you just need to know your investment horizon and risk appetite. Those who want to avoid taking risks and want to grow money over time should opt for a Fixed Deposit account. It is the best choice for low-risk investors to earn fixed returns.
Fixed Deposits (FD) are guaranteed-return investment schemes that come with the relief of stable interest returns. This investment outcome does not change throughout the Fixed Deposit’s life, even if there is a dip in the economy. Once you open a Fixed Deposit account, sit back, relax, and watch your money grow at a steady pace. You can even calculate your FD returns in advance, using a calculator Fixed Deposit. This information will be helpful to you in future financial planning.
Here is your complete guide to knowing how to use a Fixed Deposit calculator and why you should use it.
What is a Calculator for a Fixed Deposit?
A Fixed Deposit calculator is an online tool that a depositor can use to calculate their interest earnings. The tool is free to use for anyone. To see your returns from investing in a Fixed Deposit account, use this online calculator.
The calculator for a Fixed Deposit uses various variables, such as –
- The amount to be invested
- The duration of investment
- The type of Fixed Deposit you invest in
- Fixed Deposit maturity date.
Upon getting the above details, the calculator automatically shows the return you’ll get from an FD investment.
Know How to Use a Fixed Deposit Calculator
A Fixed Deposit calculator is quick and convenient to use. Use the steps below to calculate your FD earnings using a Fixed Deposit calculator.
- First, choose if you are an existing customer of the bank or are a new customer. A new customer has to first open a savings bank account with the bank and then a Fixed Deposit account.
- Next, select the customer segment applicable to you. Investors above 60 can earn higher FD interest than general customers.
- Select the type of FD you want to start (cumulative or non-cumulative) based on your preferred interest payout pattern. A cumulative Fixed Deposit allows the investor to get a lump sum payout at the end of the FD term. And a non-cumulative Fixed Deposit provides monthly or quarterly interest payments.
- Type in the date on which you want to start your FD.
- Select the deposit term between 7 days to 20 years.
- Enter the amount you want to deposit.
- The calculator uses the interest rate applicable to your FD plan based on the above details and shows you the value of your money.
You may also read – What is the meaning of fixed deposit
Why Should You Use a Fixed Deposit Calculator?
Using a Fixed Deposit calculator gets you the following benefits:
- It saves you from doing lengthy and complex manual calculations.
- There is no scope for calculation errors when you use an FD calculator.
- The calculator gives instant results for different combinations of principal amount and FD durations. Since it is a free tool, you can use it as many times as you want.
- The calculator can help you compare the FD returns
- By knowing the Fixed Deposit returns in advance, you can do better financial planning for the future and set targets you can achieve using the FD returns.
A Fixed Deposit calculator is a simple tool that saves from spending time and energy on manual interest rate calculations. An informed investor can make better investment choices and decisions for better financial planning with this calculator.
