Considering the turbulence in the economic arena, you may be on the lookout for stable investing instruments. A viable option now is the fixed deposit, and there is no dearth of options to choose from.
You can avail truly attractive deals from a range of issuers, but be sure to use an FD return calculator to find the best one. The FD return calculator is an online tool and may also be referred to as an FD calculator.
You can use it to estimate your returns, and this enables you to make an informed decision. Moreover, an FD return calculator is available online and can be used as many times as you want for free. As such, it is easy to optimise the terms and invest optimally.
Read on to learn more about the FD return calculator.
Information needed to use the FD return calculator
In order to use the FD return calculator, you need to have some key information on hand. This includes the investment amount, tenor, and interest rates. The significance of these factors is:
- Investment amount
Also known as the principal amount, this is the amount you intend to invest. You need to input this value to calculate the returns you can expect. Keep in mind that some issuers may have a minimum amount, and the calculator may not let you enter a value lower than that.
- Investment tenor
This refers to the period of time for which you will invest the principal amount. It is an important factor while calculating your returns because it determines the period for which the interest rate will be levied on the invested amount.
- Interest rates
These are the rates offered by the issuers and vary based on several factors. These include the investment tenor, investor profile, and the type of fixed deposit you choose. You can find the prevailing interest rates on the issuer’s website.
How to use the FD return calculator
You can find an FD return calculator online and a simple Google search will do. Ideally, you should use the calculator provided on the issuer’s website. Once you are on the right page, follow these steps:
- Step 1: Enter the investment amount
- Step 2: Input in the investment tenor
- Step 3: Pick the right investor and FD type
- Step 4: Click on the ‘calculate’ button or check the results
The entire process takes just four steps. Be sure to compare different combinations to understand which terms are best suited to your goals.
While using the calculator, keep the following points in mind.
- Check the denomination of the investment amount. Some calculators may have it in thousands, lakhs, or crores. Given that it is a crucial component to estimate your returns, inaccuracies here would result in errors.
- Ensure to pick the right investment tenor. Some calculators may have the investment tenor in months, days, or years. Change the tenor figure accordingly to get accurate results.
- Pick the right investor profile and FD type before entering the data. The rates offered will vary based on these factors, and you should ensure that there are no mistakes.
Benefits of using an FD return calculator
There are many benefits of using an FD return calculator. While the foremost benefit is an accurate estimate of your returns, there are other benefits that help you make a well-informed decision. They are as follows:
- Eliminates the possibility of errors due to manual calculation
You can calculate the returns of your fixed deposit manually. You can find the formula online and apply values to the variables to get estimates. However, with manual calculation, you are required to do a complex calculation, and this increases the risk of errors.
Ensuring accuracy is important while calculating your returns because it forms a major factor in your investment decision.
- Quick and easy to use
Given that it is a digital tool, all you have to do is fill in the information or use the sliders to input the data. This makes the process fairly simple and easy as compared to a manual calculation.
Moreover, since it is an automatic tool, you simply have to put in the required information and submit it. Once done, you get results in a matter of seconds, facilitating quick comparison and easier decisions.
- Easy comparison
An important part of using the calculator is to know which terms can give the best returns prior to opening the fixed deposit account. Since the calculator is quick and easy to use, you can compare different parameters quickly. This further enables you to start investing quickly and make the most of the rates on offer.
- Free of cost
Most digital provisions will allow you to use the tool free of cost. That’s not all; you can use the tool as many times as you want.
Armed with this information about the FD return calculator, make sure you open a fixed deposit account only after you find the ideal terms. While assessing the factors, keep your investment goal in mind and optimise accordingly.
This will inform you of the minimum rate you need for a given investment tenor and corpus. Apart from that, check the issuer’s terms and conditions to ensure a secure experience. Consider all the factors, including safety ratings before you start a fixed deposit account.