There are lots of things that you need to know when it comes to Fixed Deposit Calculator. Well but the first thing that you need to know about fixed deposits is to enable the earn returns that you get from the accrued savings that compound over time. Well, it helps you in enjoying the better savings and greater too. Not just that, for helping out and for understanding the exact value of your investment you get the tool which is known as fixed deposit calculator. It’s extremely simple to use and to understand when it comes to using this tool.
How does a Fixed Deposit Calculator work?
For understanding how fixed deposit calculator works, you need to know about some steps which help you in knowing better about the work. Well, it can also depend on the option or organization you choosing for the fixed deposit calculator. Well for having a general idea about how this calculator works, here is everything that you need to know.
- Amount deposit: well the amount you use for investment in the FD. However, the investment is done for one time but it depends on the amount you choose for the investment. However, it’s important for you to understand the minimum amount that you have to invest in the FD.
- The rate of interest: it’s an amount that you get on the deposit you invested. However, it can vary as it completely depends on the value you are choosing for the deposit as well as tenure.
- Deposit Tenure: well, tenure is basically made for the investment. However, inflexible tenures you get the options between 7 days to 10 years.
Well, once you enter the details that are mentioned above you will get the amount with the help of FD calculators. The amount you will get at the end, it will be the maturity amount which is based on the overall calculation that is made after you completed the details. Well, It not just help you in getting the correct amount but also save your time as well as keep the process hassle-free.
Benefits of Investing in a Fixed Deposit?
There are various benefits that you get when you invest in fixed deposit. Here are some benefits that you need to understand:
- Get the assurance of return: the investment is secure and safe which means you will get your return that you have invested. Not just that, it is a completely hassle-free process too.
- Develop the habit of saving: for those who find saving money difficulty, for them, this can be helpful. Here you get the time period which gets fixed. It helps in developing the habit of saving money.
- Enjoy the returns better than savings account: comparing the two options, you get better offers and results in fixed deposit. Where you get the interest rate of up to 6% in savings accounts, here you get the interest rate that starts from 7 %.
- Simple withdrawal: if you have an emergency and there is an urgent need of money then you can simply withdraw the amount before the deposit gets matures. However, there are charges that you have to pay a penalty.
- Pay the interest at different intervals: it keeps the interest payment simple. You are allowed to choose the interval in which you like to do or find comfortable. However, you can choose maturity, annually and monthly basis.
- Flexible options in tenure: not just that you can also enjoy the flexible tenure and also you can fix the money as long you like. Along with that, you are even allowed to invest the money in the time period of 1 week to 10 years.
Fixed Deposit vs Recurring Deposit?
There are some basic differences that you will get in both, well for understanding the better here are the points that you should know. But before, the recurring deposit is basically investments that you have to do in small amounts in each month. Here the deposit gets the interest and you receive the interest and principal at the end.
However, fixed deposit whereas ask for the lump sum amount deposit at the term’s beginning. Also, you are free to redeem the interest and principal at the end on the basis of the specific term.
- The investment differences: Well when it comes to the interest rate on both, it varies as it depends on the time. But in some cases, both interests are same on both deposits. However, sometimes the interest rate on the fixed deposit is higher.
- Tenures of both deposits: when it comes to the recurring deposit, tenures range can be six months to the next ten years. However but with the fixed deposit, it can be low as it gets seven days to 10 years or more.
- Liquidity: however both have same fixed terms but you can redeem the amount before it gets mature. But before you do that, make sure that you consult with your bank as there are some charges that you have to pay as the penalty.
- Collateral: if you are planning to take a loan, then you can do it against your fixed deposit and recurring deposit as the deposit amount will be considered as the collateral.
What is Fixed Deposit Interest Rate?
The interest rate that you get on the fixed rate is higher if you compare it with the saving account. Well, it depends on the amount of the fixed deposit and the tenure. However, the interest rate can vary as it depends on the bank you choose. That’s why is important to compare before you decide to choose the option. The interest payouts or the frequencies compounding varies between the schemes of the fixed deposit. Along with that, it is usually divided into quarterly, half-yearly and yearly too. But here is the thing that you should keep in your head; the interest rate is already decided on tax saving on the fixed deposit at the start of the financial year by the country’s government.
Factors That Can Affect Fixed Deposit Interest Rate:
There are some factors which can get the fixed deposit interest rate. The fixed deposit has its own fixed rate of interest through its tenure. However, there are always chances that the interest rate can change where the renewal of FD and reinvestment depends on the interest rate at maturity. Well, the interest rate can always decrease or increase as it completely depends on the norms of the bank. That why it’s important to make sure that you compare the fixed deposit and also the reinvestment so you can get the higher interest offers.
Well for understanding the factors that can affect, here are the points that you need to know:
1. RBI or Reserve bank of India: RBI is the central bank of the country that is controlling all monetary policy as well as managing the banks. Sometimes, RBI implants several policies and regulations on the banks in order to maximize their credit control and to make sure that the flow of fund is healthy in the country. These regulations sometimes affect the interest rate of the products that are related to financial.
2. Recession of economic: well understanding this term in simple words, recession simply refers to the slowdown of economic. During such situations, RBI increases the supply of money in the market and also lowers the rate of interest on deposits in the bank, stock as well as cash. Because of which the interest rate in FD also gets affected.
3. Inflation: Sometimes there are some changes in the price which devaluate the rupees and reduce the power too. because of which, the government has to remunerate all losses in interest that lent loans and thus, the bank offer interest rate in higher on the term deposit in order to attract more cash.
FD Maturity Calculator:
About FD maturity calculator, well it’s a tool that you can use for calculating the maturity amount or the return that you will get on your fixed deposit. When it comes to how to use the FD maturity calculator, there is a very simple process. The calculator is simpler to any other calculator you will find. You just need to fill the information and details for getting the results. However, it includes details like your deposit amount, your tenure and the interest rate.
Fixed deposit is no surely one of the saving options that you can consider. However there are lots of things that come with the saying option, that’s why you need to make sure that you remember everything. Along with that, the fixed deposit calculator will help you in calculating the extra amount that your investment has as it grows. Along with that, it helps you in saving the money and enjoying other benefits that come with the fixed deposit. It’s better to understand more about how it works as well as understand other elements and factors that can affect the interest so you can enjoy it.