A fixed deposit is a versatile savings tool that helps you grow your savings in a safe and consistent manner. It can be a great tool to help you meet your financial goals, while also enabling you to save for emergencies, which may require immediate financial action.
One of the best advantages of growing your savings with a fixed deposit, is that you can predict the returns beforehand.
If you’re looking to get an estimate of the potential growth of your fixed deposits, you could take help from a fixed deposit calculator.
How can a Fixed Deposit Calculator help you?
You can determine the returns on your deposit by using a manual calculation formula that entails tenure, computing frequency, principal amount and interest rates. Here’s the formula to help you calculate the maturity amount using manual calculations:
M = P + (P x r x t/100)
In this formula, here are the values denoted:
M = Maturity Amount
P = Principal Deposit Amount
r = Interest Rate
t = Tenor
To help you understand how the formula works, let’s consider the following values as an example:
P = ₹2,00,000
r = 6.5% per annum
t = 5 years
M = P + (P x r x t/100)
M = 2,00,000 + (2,00,000 x 6.5 x 5/100)
M = ₹2,74,017
With these manual calculations, you can determine the returns on your deposit. However, to help you compute your returns without these manual computations, you can consider using an online FD Calculator.
There are several benefits of using a fixed deposit calculator, some of which are listed below:
- Analyse and compare returns online
By using the FD calculator online, you can easily analyse and compare returns you gain, by choosing different tenors or payout frequencies. Once the approximate interest and maturity amount appear on your screen, you can adjust the rate of interest, principal amount, and tenor accordingly. This way, you can draw multiple inferences to do a comparative analysis, so you can make an informed decision on the best way to grow your savings.
- Estimate values easily
When saving your hard-earned money through fixed deposits, using an FD calculator helps you know the estimated maturity and the interest amount. Based on the principal amount, rate of interest, and tenor, the fixed deposit calculator helps you determine the approximate returns you can gain. Instead of computing these returns through manual calculations, FD Calculator is a time-saving tool to help you get the results within a few seconds.
- Gain unlimited access
To meet your financial goals, it is important to have a sound savings plan that aligns with your needs. You can estimate these values for a wide range of tenors, payout frequencies, etc. to choose the right tenor, payout options and amount that you can save.
This may require you to use this calculator multiple times. With FD Calculator, you can calculate as many times as you’d want, without any charges.
How to Use an FD Calculator?
Here’s a step-wise guide which can aid you with the usage of the fixed deposit calculator:
Step 1: Enter your Savings Amount
Enter the amount you plan to save in a fixed deposit.
Step 2: Choose the Tenor
Enter the preferred tenor in the fixed deposit calculator.
Step 3: Adjust the Rate of Interest
Set the preferred interest rate depending on the ones offered by your chosen NBFC or bank.
Step 4: Check the Amount of Interest and Maturity
According to the values and the numbers which you enter in the FD calculator, an estimated maturity and interest amount will be displayed on your screen.
Using the FD calculator is easy, but you must consider some essential factors before using the FD Calculator. Here’s a look at key considerations to remember:
- Amount of Deposit – This is the amount (minimum of Rs. 1000).
- Rate of Interest – The interest rate may vary according to the preferred tenor and the financial institution you opt for. Different financial institutions provide different returns.
- Deposit Tenor – The tenor ranges from 7 days to 10 years.
- Payout Frequency – This is the frequency at which the interest is paid out. You can choose interest payout frequency as per your needs. You can receive interest payments on an annual, quarterly, half-yearly or monthly basis. You can also choose to receive your returns altogether, at the end of maturity.
The process of using the FD calculator to estimate the returns that your fixed deposit savings will fetch is seamless. Gauge all the necessary factors, calculate the exact amount which you will receive at maturity, and plan your future savings accordingly with the help of FD calculator. Avoid the hassles of calculating these manually by using complex formulae and save your time to a great degree.
