Investing in an FD is a smart option as it keeps your investment safe even when the market is volatile. The assured returns provided by FDs enable you to hedge your portfolio against market risks and you are also able to save enough money till retirement.
However, you also need to know how much you can earn by investing in a particular FD. For that, you can use an FD calculator that reflects the interest and final maturity value once you enter the necessary details. Here’s how an FD calculator can help you in future financial planning:
Compare FDs conveniently
Comparing different fixed deposit plans can be cumbersome if you try to do it the old way by comparing their interest rates, tenors, liquidity options, etc. However, the same comparison can be done by using an FD calculator in minutes. It not only minimizes your efforts but also helps you to make a decision based on your financial requirements quickly.
Minimizes the errors
Manual FD interest calculation is complex as it depends on the types of fixed deposit you are investing in. The interest of a cumulative FD is compounded quarterly but the interest applicable on a non-cumulative FD depends on the interest payout frequency. On the other hand, while calculating the returns on an FD calculator, you just have to select whether you are interested in cumulative FD or non-cumulative FD and the integrated program will calculate the interest earnings and maturity value automatically. The errors that can be introduced during manual calculation are eliminated and this makes your decision much more accurate and transparent.
Laddering fixed deposits
When you ladder your investment across multiple fixed deposits, you can benefit from the averaging of interest rates across different FDs of different types and tenors. This technique not only provides liquidity when it matters but also helps you to invest the matured amount in a high paying FD whenever there is an opportunity.
However, by laddering FDs without forecasting the returns, you might end up falling short of your financial goals. By accessing an FD calculator, you can predict the exact amount that you will be earning as each FD matures. This will help you to ladder your investments in such a way that your liquidity needs are resolved and your financial goals are also met.
For example, Bajaj Finance provides a multi-deposit facility through which you can book multiple FDs by splitting up your funds in different FD plans and types. Moreover, a flexible tenor ranging from 12 to 60 months can be selected for each of these deposits. This helps you to ladder your deposits smoothly and you can also use their online FD rate calculator to check the returns provided by every deposit.
Also, FD interest rates up to 7.35% ensures that your financial goals are met easily. On booking an FD online, you will get 0.10% interest rate than the standard FD rate applicable on that particular tenor and FD type.
Senior citizens get an additional 0.25% interest rate irrespective of whether they choose the online or offline process for booking an FD. These FDs are secure since they are highly rated by ICRA (MAAA/stable rating) and CRISIL (FAAA/stable rating).
Fixed deposit plans enable you to earn a fixed income and keep your deposits safe from market fluctuations. You can even keep a track of your earnings as the interest rate and tenor applicable on a particular FD plan are also fixed. However, calculating the interest earnings and returns manually is a tiresome job as the interest calculation is a bit complicated and depends on the type of fixed deposit chosen by you. An FD calculator monthly interest tool is provided on the websites of banks and NBFCs for this purpose. These calculators help you to compare different FD plans and also enable you to ladder your deposits smartly. Therefore, they prove to be an indispensable tool to plan your finances.