Things You Should Be Watchful Of When Using An FD Interest Calculator
Posted on April 10, 2017
The rates of fixed deposit in India have always been subject to several factors that cause the rate to rise and fall. In this situation, investors need to be watchful of present fixed deposit interest rates before making a choice. Sometimes, individuals often have to run from one bank to another to know who offers the highest rate of interest.
Even if you know which bank or NBFC offers the highest rate of interest on fd. It’s not easy to deduce the exact amount the investment would yield on maturity. This is where the role of the fixed deposit interest calculator comes to the fore.
With the FD interest calculator, go to the official websites of different banks/NBFCs, open the required page. Then, choose the type of customer you are, the amount of money that you are willing to invest and finally the tenure. Once you confirm this, the fixed deposit interest calculator shows you results of the value you will receive.
This maturity calculator not only saves time and effort, but aids you with the accurate data so you can make an informed decision. Using investment calculators online, you should consider the following to ensure risk-free incomes.
The Frequency of Interest Payment:
This is one of the most important factors when making an investment with banks or NBFCs. You have to decide whether you want to get interest at regular intervals or at the time of maturity. If you are looking for regular income, then you have to input that into the calculator. The results will be dependent on what you choose.
Investments are termed as non-cumulative since you will be withdrawing interest. It won’t be compounded quarterly. You can also choose to receive interest with the principal amount at maturity. This type of investment is called a cumulative deposit. Here, the interest is compounded every 3 months. That amount is again reinvested with the principal amount. To know which organization offers the highest returns, use the fixed deposit compound interest calculator they offer.
The Return on Investment Differs From The Applicable Rate of Interest:
As interest accrues every quarter, an investment that offers 8 percent interest per annum means that you’ll receive a return of 8.24 percent. This means that if you have invested Rs. 100 in a fixed deposit, you will receive Rs. 108.24 at the end of a year. Although it is quite easy to determine the maturity amount for Rs. 100, it may not be that easy when you are planning to invest a lump sum amount of money. With so many banks and NBFCs offering varying rates, it becomes even more complicated. So, you can use the fixed deposit interest calculator online that can give you an accurate result of the maturity value.
Breaking The Fixed Deposit in Times of Financial Crisis:
When you need of money, you might want to break a fixed deposit to pay for the emergency at hand. But remember that you won’t receive the maturity value that’s shown in the calculator. Most banks and NBFCs deduct about 0.5 to 1 percent from the interest payable if you want to break the deposit. You should be very careful about this at the time of making an investment so you don’t end up incurring losses.
When you are aware of these considerations, you can choose the investment that can yield high returns. That’s the best way to make an investment and ensure that you’re getting something quantifiable out of it.