When it comes to banking terms, a Fixed Deposit can also be referred to as a Term Deposit. It is an investment option to achieve the right balance between one’s financial portfolio and the high yield results. With the help of the Fixed Deposit calculator, one can make an informed decision regarding the appropriate investment amount and the duration of time that one should invest in a Fixed Deposit Scheme.
Overview of the FD calculator
Investors use the fixed deposit calculator to estimate the maturity amount they can expect at the end of fixed deposit tenure. The fixed deposit calculator can calculate the interest owed on FD investments. The maturity of a fixed deposit depends on the deposit amount, the interest rate, and tenure.
Advantages of using a Fixed Deposit calculator
Investing in a Fixed Deposit also involves checking one’s budget and ensuring it meets one’s financial objectives. Fixed deposit is about minimizing the risk and ensuring a guaranteed investment return. A certain amount of risk remains with you even if you invest in the market. There is a limit to how much you can absorb losses when you invest in FDs. Additionally, a FD return calculator can be one of the best ways to compare various fixed deposit schemes offered by banks and other financial institutions. An individual can use a fixed deposit calculator to see which fixed deposit scheme provides the best return on investment.
Benefits of utilizing FD calculator
- It is an automatic calculator, which means there is no possibility of errors.
- Reducing effort, time, amounts, and money can be accomplished by eliminating cumbersome calculations at multiple tenures and rates.
- The tool is flexible, so the user can use it multiple times to compare the return on different fixed interest rates, tenures, and amounts.
Factors that affect the interest rate on fixed deposits
Fixed deposits are becoming a popular option of investment for banks as well as other financial institutions. Listed below are some of the significant factors that affect the interest rates on fixed deposits
Tenure of the deposit
Fixed deposits have tenure or the period during which the deposit amount is invested. It is a matter of fact that depending on the bank, this period can range from 7 days to ten years and vary from one bank to another. It is also important to note that the interest rates on fixed deposits are also subject to the deposit terms.
How does the FD calculator work?
Fixed Deposit calculator calculates the amount you will earn when an fixed deposit matures for your deposit amount after accounting for the appropriate interest rate with your chosen FD scheme. Several fixed deposit calculator tools are available online, and you can select one to determine the amount of money you should invest in FDs. Following are some tips to help you calculate the maturity amount of FD using FD return calculator.
- Enter the principal amount in first field
- Enter the interest rate in next field
- Enter the tenure in year in last field
- To calculate, click on the “Calculate” option
Age of the applicant
Senior citizens may receive preferential interest rates from fixed deposit providers that range from 0.25% to 0.75%. Banks may limit the age of investors to at least 60 to be allowed to invest, while others may include investors aged 55 and over in the seniors’ category.
Current economic situation
Banks and other financial institutions are required to adjust the interest rates on fixed deposits regularly to reflect changes in the economy, including changes in the repo rate of the Reserve Bank of India and inflation rates. Hence, it is safe for us to say that prevailing economic conditions can potentially affect the interest rates on fixed deposits directly or indirectly.