How to Plan Your Finances with FD Calculator | The Financial Express

How to Plan Your Finances with FD Calculator

A fixed deposit calculator is a great tool to help you plan how to grow your savings with FD. Know your returns with an FD calculator before you invest.

How to Plan Your Finances with FD Calculator
Plan Your Finances with FD Calculator

In a world driven by instant gratification, having your finances in order is a prerequisite, so you can fulfil your goals and cater to emergencies. A planned savings strategy can help you secure your financial future, easily. 

Fixed Deposit is one such tool that offers attractive interest rates and tenors that are tailored to suit your financial requirements. All you need to do is to set aside a sum of savings that grows at a predetermined rate of interest. 

Banks and Non-banking Financial Companies (NBFCs) offer fixed deposits at different interest rates. Additionally, you can accurately calculate your returns and make the right investment choices with a Fixed Deposit Calculator.

What is a Fixed Deposit?

Fixed Deposits are saving instruments that let you invest a lump sum amount for a decided period of time and rate of interest. At the end of the pre-decided tenor you will receive the amount you invested as well as gain a compound interest on it. 

You can choose a tenor ranging from 7 days to 10 years as per your preference, which is why Fixed Deposits are also called Term Deposits. You can also choose when you want to receive your interest amount, be it at maturity or on a periodic basis. You can either choose a Cumulative Fixed Deposit or a Non-Cumulative Fixed Deposit based on when you want to receive the returns on your investment.

Features of a Fixed Deposit:

Fixed Deposits are efficient saving tools that include a number of features which make them an excellent choice if you’re looking to park your savings securely. Some of its features are listed below:

  • Flexible tenor: Banks/NBFCs offer flexible tenor options starting from 7 days up to 10 years. Short-term Fixed Deposits have a tenor of less than 12 months and Long-term Deposits have a tenor of up to 10 years. 
  • Good returns: On the basis of the chosen period to get your returns, you can opt for either a Cumulative FD or a Non-Cumulative FD. 

Cumulative FD allows you to get your total interest amount at maturity. Whereas, through a Non-Cumulative FD the total interest amount could be split over a monthly, quarterly, half-yearly or annual basis. 

  • Attractive interest rates: The rate of interest on Fixed Deposits vary depending on the chosen tenor. Longer the tenor, higher the rate of interest. Financial institutions offer rates of interest starting at 2.50% that go up to 7.50%. In addition, most Banks/NBFCs offer higher interest rates for Senior Citizens that go up to 7.75%. 
  • Availability of Loan: In the event of a financial emergency, you can avail a loan against your Fixed Deposit to refrain from liquidating your FD prematurely. Doing so will help you meet unplanned monetary needs, and also keep you from paying a penalty on premature withdrawal.

You can also plan your finances better with FD Calculators which are vital to your investment decisions. You can access an FD Calculator online through various financial marketplaces and bank websites.

Fixed Deposit Calculator: 

Calculating your returns on your own can be quite tedious which is where the Fixed Deposit Calculator comes in handy. With the Fixed Deposit Calculator you can calculate your returns with great ease and accuracy. All you have to do is enter the amount you would like to deposit, the tenor you want to invest it for and the rate of interest accordingly. You can easily access an FD Calculator online and be able to see what your returns look like at the click of a button. 

Here’s a table to help you understand the maturity amount you’re likely to earn on an investment of Rs. 1 Lakh for a rate of interest of 7.75% for a tenor of 5 years: 

Deposit AmountRate of InterestInterest Amount Maturity Amount 
Rs. 1,00,0007.75%Rs. 45,240Rs. 1,45,240

As shown in the table, you will earn an interest amount of Rs. 45,240 at the end of your tenor of 5 years, in addition to your initial investment of Rs.1,00,000. 

Features of a Fixed Deposit Calculator :

There are a number of reasons why using a Fixed Deposit Calculator is better than manually calculating your returns. Here are some of them: 

  • A Fixed Deposit Calculator can give you accurate calculations of your maturity amount 
  • They are efficient when compared to digital calculators
  • They are time-saving and easy to use 
  • You can easily access an FD calculator online 
  • Through an FD calculator you can compare your maturity amounts and decide the best tenor

Making an informed decision regarding how you would like to invest your money requires a good deal of research and calculation. FDs are a great choice if you’re looking to sort your finances through a secure form of investment. 

Additionally, many tools such as FD calculators provide great assistance to help you make the right decision. You can access an FD calculator online with great ease and estimate your returns accurately. This helps you plan your finances better, when growing your savings with a fixed deposit.

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