How to use an FD calculator to get the best interest rate for your savings

Investing money at the right time in life helps you grow your wealth exponentially. This ultimately helps in achieving financial goals which an individual had already planned. Now, these goals can be buying a new house, a new car or even funding your children’s education.

Around a year ago, when I finally entered the professional field and started earning, I always had the word ‘Investment’ in the back of my mind. Moreover, when you calculate fd interest that is offered by financial institutions as well as banks in India, you know it definitely is a worthy investment.

What is a fixed deposit?

A fixed deposit (FD) is a financial instrument offered by banks and financial institutions that allows customers to deposit a certain amount for a fixed tenure at a fixed rate of interest. Moreover, once the money is deposited in an FD account, it cannot be withdrawn before the maturity date without a minor penalty.

Especially in India, it is considered one of the safest investments as the principal amount and the interest earned here is guaranteed. Also, the interest you earn in this investment scheme is usually higher than that of a savings account.

What are its benefits?

● Assured returns

As the FD interest rate here is fixed and is not affected by what’s going on in the market, an fd assures guaranteed returns.

● Tax benefits

As per the law, investors can get income tax deductions up to Rs 1.5 lakh per annum when they invest in a fixed deposit. This falls under Section 80C of the Income Tax Act of 1961.

● Easy withdrawal

Most financial institutions or banks allow premature withdrawal of fixed deposits. However, a minor penalty is involved when you withdraw money before maturity.

What is an FD calculator?

As the name suggests, it is a tool used to calculate the interest amount earned on a fixed deposit based on the deposit amount, rate of interest, and tenure. This is basically used to estimate the maturity value of the investment, which is the total amount that will be received by the investor when the term ends. Moreover, this tool also helps in comparing different investment options, which ultimately helps in choosing the one that offers the best returns.

Which calculator to use and how to use it?

There are tons of such tools available in the market. However, in my personal opinion, I’ve been using the FD calculator offered by the Bajaj Finserv application. Now, I’m not promoting any organization here but sharing my personal experience as it is one of the easiest tools to use. After entering just a few details, it offers the exact figures within a blink of an eye.

  1. Download the app from App Store/Play Store
  2. Sign up after entering the required details
  3. Tap on the top left (three lines) on the home page
  4. Choose the ‘Try our Calculators’ option
  5. Go to Deposits Calculators
  6. Tap on Fixed Deposit Interest Calculator
  7. Enter required details

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