Fixed deposits are the most preferred form of investment offered by all financial institutions. This investment scheme involves assured returns on flexible duration of investment and a predetermined rate of interest. One of the most significant advantages of fixed deposits is that they are not affected by market fluctuations.
Regardless of the market fluctuations, the investor will earn interest on their fixed deposit. The higher the duration of the investment, the higher the interest earned. However, because different banks offer different interest rates and schemes, it can be difficult for investors to determine which bank is the best fit for their deposits. Hence, the fixed deposit calculator comes into the picture.
What is a fixed deposit calculator for an Indian audience?
A Fixed Deposit calculator is an instrument that helps in determining the total amount of interest earned on the fixed deposit on the completion of the deposit tenure. With the help of this investment calculator, investors can have an estimate of interest earned before making an investment, thereby helping them to make informed decisions. The fixed deposit calculator takes the investment amount, the current rate of interest offered by the bank, and tenure into consideration while calculating the interest amount.
Using the Fixed Deposit Calculator
It is always a good idea to know the return on investment before making any. This ensures whether the selected investment scheme (in this case, fixed deposits) is the right choice and whether it will help in meeting their financial goals. To know your estimated earned interest on a fixed deposit, the investor needs to:
- Enter the investment target investment amount in the calculator.
- Enter the duration of investment in years or months as suggested by the calculator.
- Provide the current rate of interest.
- Choose a payout tenure for your compounding fixed deposit, such as yearly, monthly, or quarterly.
On the basis of the above information, the fixed deposit calculator will provide the estimated amount of interest gained on the investment amount and the final maturity value.
Benefits of Using a Fixed Deposit Calculator
Investing in any kind of scheme is a huge decision that should be taken only after proper consideration. It requires thorough analysis and research. Please note that the investment scheme you choose should meet your financial goals, hence, use the investment calculator to know if you are making an informed decision. Furthermore, it helps in saving the investor from any disappointments or regrets later. Once you have your investment goal in mind, you can choose the correct investment scheme. Here are some simple, yet effective benefits of using an investment calculator: –
- Different banks offer different rates of interest. Hence, it can be taxing to know which bank or financial institution is the correct option for your investment. The fixed deposit calculator helps in comparing interest rates from different banks, thereby helping you to optimize your investments.
- Depending on your financial goals, you can choose your investment tenure from 7 days to 10 years. By adjusting the period on the calculator, you can know which period is best suited to meet your investment goals.
- You also have the option to choose the compounding period for your interest earned. You can choose yearly, quarterly, or monthly payout periods as per your needs.
As per the above mentioned benefits, using an investment calculator is the right move to make on your investments.
Are fixed deposits a safe investment strategy?
The financial markets are an unpredictable and turbulent space. Hence, sometimes it is difficult to get positive returns on investments. Fixed deposits are considered to be the safest option for investment as they do not have any effects of turbulence in the market.
Once a fixed deposit is made, the deposited money cannot be withdrawn until maturity, or else the investor would have to pay a penalty on the amount deposited. Another reason to choose fixed deposits as the preferred mode of investment is that they offer a higher rate of interest on the deposited amount than the amount sitting in your conventional savings account.
Also, for someone who does not have much knowledge of high-risk investment schemes like mutual funds or bonds, it is a better and safer option with assured returns. Fixed deposit calculators make the process easier as the investor can get an estimate of the returns before even making the investment, which is a good starting point for someone new to the whole idea of investments.
Calculating the maturity amount manually can be equally cumbersome and exhausting as there are several factors involved. Investment calculators help in making the job easier. It assists in calculating the amount you would receive at the end of the deposit period by taking the applicable rate of interest into consideration in just a few seconds. Therefore, use the fixed deposit calculator to make an informed investment decision.