When you invest your money in a fixed deposit, you know the interest rate you will get against the tenor you have selected. You have to wait for the FD advice or receipt to find out how much amount interest will accrue and what amount you will get at the maturity. By then, there is no turning back if you need to change your decision.
The only way out is premature withdrawal by paying a penalty fee or closure of the Fixed Deposit. However, you can avoid this situation by calculating the returns before investing. Now, there are two ways to do this – mathematical formula and online FD rate calculator.
The general mathematical formula for calculating interest on any fixed deposit is:
- A = P (1 + r/n) ^ (nt)
- A is Maturity Amount
- P is Deposit Amount
- r is Rate of Interest
- n is Compounded Interest Frequency
- t is Tenor
The formula is fairly complicated and time-consuming. It is okay to use it once in a manually on pen and paper or through your regular calculator. However, it can’t guarantee accurate results. Moreover, when you want to make several FDs at a time of varying tenor, interest rate and interest payout frequency, this formula is a major hassle.
On the contrary, an online FD rate calculator can do the calculations automatically within a matter of seconds. Most importantly, it yields precise numbers. When you have accurate results on your fingertips, you can make an informed investment decision.
You can use this calculator on all types of fixed deposits such as cumulative and non-cumulative. In a cumulative FD, the interest accrues annually but it is reinvested every year on the principal till the maturity. In a non-cumulative FD, you can choose interest payout frequency as monthly, quarterly, half-yearly and yearly once you invest your money
How to Use Online FD Calculator to Invest Your Money?
First of all, always use a reliable online FD rate calculator from a trusted source such as that of Bajaj Finance. The steps you need to follow are:
- Select your customer type as applicable – existing customer, new customer or senior citizen.
- Select from cumulative or non-cumulative option for calculation.
- Enter the FD amount you want to invest.
- Enter the investment tenor.
If you have chosen cumulative option, then you will get total interest payout, maturity date and total maturity amount. If you have chosen the non-cumulative option when you invest your money, the FD calculator monthly interest will show you the fixed deposit interest and returns as per your choice of payout frequency.
Online FD rate calculator from trustworthy sources like Bajaj Finance website is a useful tool to invest your money wisely. You have to simply enter fixed deposit amount, tenor and interest payout frequency in auto-computed fields.
The calculator will generate results at one click within a few seconds for all types of fixed deposits. You can change the variables as many as times you want to compare the returns. You can determine whether the returns meet your financial goals.
Then, you can invest your money in FD as per your preferred amount and tenor. Online FD calculators are very easy and quick to use – make the most of it for investment decisions. Since your investment amount is locked-in in fixed deposit until maturity, it is best to calculate your returns in advance using the FD rate calculator.
It is an easy-to-use tool available on the websites of banks and NBFCs. You simply need to enter the values of important parameters such as the investment amount, duration of the investment, and your customer type (new customer, existing customer or senior citizen).
Entering these values will give you precise values for the interest-earning, maturity date and the interest rate applicable on your investment. There is an in-built slider on the FD calculator to help you adjust the values of these variables and find out the right investment amount needed to meet a specific financial goal within a set period of time.
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