FD Calculator

Introduction to FD Calculator

Investments are both good and bad, once you acknowledge the type of investments you’re making and the ones which are really required. Recently we talked about Asset Allocation, and it’s an actually beneficial procedure to keep the money diversified, being super safe.

One of the diversification styles majorly include the Fixed Deposits that we make through Banks and NBFCs, and they are the eternally risk free investments. Basically, it’s an investment where you agree for a locking period, till which you cannot redeem your money, or you’ll get charged.

The best part is that you get a mere 5-6% APY with zero risk factors at all once you’ve that money of yours as a part of Fixed Deposit. Here we got a utility calculator app for you that will help to estimate the amount and interest earnings from Fixed Deposits over time. The below article is going to include all the important details about FDs and this superficial calculator.

Understanding Fixed Deposits (FDs)

There is literally no time to get started investing your first buck, and understanding risk management is so important at first. If you’re looking for an easy and instant investment plan with zero risk at all, Fixed Deposits can be super helpful with the authorized trust.

FDs are basically the risk free investments for the risk averse persons who sound good with simplistic returns for having a lump sum or even generic principal amount. The locking period of these investments generally ranges between 7 days and 10 years.

Dynamically, it’s so advantageous to invest at least a few percent of your portfolio in Fixed Deposits for having a no-risk divergence keeping your other investments superb safe. Moreover, you can also maximize the profits and interest rates by choosing longer locking terms.

However, you also need to consider very well about the money that you’re investing in these deposits. We just ought to remind you that these locking periods cannot break so easily, and you may have to pay some Liquidity Needs charges or Withdrawal Fees before maturity.

How Does an FD Calculator Work?

There is a simple formulae that the FD Calculator uses here to generate the accurate results –

M = P + (P*r*t/100), where

P belongs to the Principal Amount that you’re going to invest,

r belongs to the rate of interest you’re getting through Banks,

it belongs to the tenure period of your Fixed Deposits.

Using these above pieces of information, one can simply find out the Fixed Deposit return using the scientific calculator, but the calculator you’ll get here is way simpler. You can use it for having faster and proper results, as well as real time alteration to compare the best FD options.

Beneficially, you can also use the Compounded part of Calculator to find the hyper profits in a longer term with the funds being compounded every year. There are many more benefits we’ll know soon below.

Types of FD Calculators

These are different types of FD Calculators, used contrarily for the unique FD transactions –

Simple FD Calculator

Simple FD Calculator is the generic one which we majorly use for finding the normal Fixed Deposit returns, without including any special transactions, such as Taxation of Pensions.

Compound FD Calculator

Compound FD Calculator can help you find the FD returns over time with the compounded returns, having interest on the interest. In that case, you will use the exact procedure, but with the compounding frequency (like in months, quarters, years, or decades.)

Tax-Saver FD Calculator

Tax Saver FD Calculator won’t be going to save your taxes by the way. It’s just a calculator that’d assess the accounting of taxes, and will show an overall post-tax calculation. Use it if you have taxation related concerns to find out actual future returns after deducting those taxes.

Senior Citizen FD Calculator

Senior Citizens can also use a different type of FD Calculator to assess the additional details about higher interest rates, and higher tenure years. Afterward, they can also compare different Fixed Deposit options with the data they got through the feeds.

Using an FD Calculator Effectively

Using an economic calculator for the very first time won’t show you all its superpowers at once. There are a few hidden tips that you can employ for using an FD Calculator way effectively as shown below –

Step-by-Step Guide

1. Inscribe the Principal amount you’re going to invest
2. Describe the interest rates offered by the bank.
3. Choose the tenure period.
4. Click the Calculate button, and returns would get instant on your view.

Basically, the results you get are in numeral form containing the final returns that your fixed deposit will make on a settled tenure period. Once you understand that, you can also use it effectively for comparing different FD options and set appropriate calculator types.

You can also find longer term returns using the Compounding FD Calculator and get an optimal data output once you have admitted the cent percent correct details. 

Factors Affecting FD Returns

All the details required to calculate the accurate FD Returns actually are the biggest factors affecting the FD Returns. We’re listing them all below with a better understanding –

Interest Rate Variations

At the higher frame, you will get the 6% APR in a genuine and trusted bank, whereas most of the government banks allow not more than 4.5-5% APR. It highly affects the returns over time as even a single percent can mean a lot for higher and lower returns relatively.

Tenure of the Fixed Deposit

Tenure period can affect the FD Returns differently once they contain compounding or not. Still, you’ll majorly find higher interest rates in the longer locking period, whereas the lower ones besides.

Compounding Frequency

Compound interest is the eighth wonder of the world, and that way it amazingly affects the FD Returns. It means that the Compounded FDs are 5 times more return payer than the non-compounding Fixed Deposit programs.

Taxation and TDS (Tax Deducted at Source)

Lastly, we can also see the taxation to affect FD Returns adversely. The more tax percentage you’re yielding, lesser would be the overall FD Returns after grossing.

Comparing FD Options with an FD Calculator

Choosing the best FD protocol is a little hard as the numbers take time to get on the mind. But the FD Calculator placed on this webpage will make it easier comparing different FD options with the simple metrics. It’ll use the below factors to make the things sound superficial –

Comparing Interest Rates

Once you’re onboard using the calculator, you can put on the details about each bank or financial institution once by one to compare the interest rates with the live assessed results.

Evaluating Tenure and Lock-in Periods

Assessing the tenure period is also important, as the higher lock-in periods will make you get more returns. However, it simultaneously risks your liquidity need as you cannot withdraw without charges before maturity periods. Use the calculator to evaluate unique lock-in periods.

Analyzing the Impact of Compounding Frequencies

Using a Compound FD Calculator, one can find out the compounded returns to compare the better options on the list. Mostly, you’ll see longer periods in compounding, but way better returns than the actual one lock-in period. Assess the same using the calculator.

Tips for Maximizing FD Returns

Never depend on a single income. Make money from your money and maximize the FD Returns using a few tips as followed –

Choosing the Right Type of Fixed Deposit

Opting for a longer tenure or lock-in period can make you get the best returns overall. But if you’re not good with locking in your liquidity for a longer period, find some trusted private FD options offering more interest rates in lower time frames.

Exploring Additional Benefits and Features

There are a few benefits or privileges offered by a few FD plans, where the major one is having a Credit Card for more than 90% of your FD limit. You can use this card for enhancing your Credit Scores, when at the same time your money is getting newer heights.

Monitoring Interest Rate Changes and Reinvesting

Most of the Financial Institutions offering Fixed Deposits offer no more than 5% APR, but at the same time, you can look for the options with reinvesting plans. Reinvesting can help you compound your returns and make an interest over the interest.

Breaking before Maturity Age

No one will ever recommend you to do this. The best tip I’ll recommend to you today is to keep only the amount which you won’t need till the maturity or tenure period of Fixed Deposits. Withdrawal can be super negative, as on the time when you are expecting the returns.

Risks and Limitations of FD Calculators

Investing is not just about making money; it’s more about understanding better risk/reward analytics while keeping money diversified. Although, FD don’t have any risks, but there are a few limitations of this FD Calculator which we think are beneficial for you to cognize before using –

Assumptions and Accuracy of Calculations

The complete accuracy of the calculations made through the FD Calculator are proficient as per the data you fed in there. Calculations can have drastic changes on the simple feeding changes, so you need to be much careful when feeding principal amount, interest rates, and tenure period.

External Factors Affecting FD Returns

You’ll see many external factors that you’ll adore to include while calculating FD Returns, like the withdrawal charges, taxation details, and multiple timed investments. As a limitation, there are no options to add these pieces of data among the calculator feeding, and so you’ll be required to make those few calculations manually.

Limitations of FD Calculators

All the Calculations made through the algorithms of FD Calculator rely on a one-time filled interest rate, which can be changed manually. There is no option to include the liquidity need charges if you’re withdrawing before the maturity age. Also, you’d see no space for the tax belongings in this FD Calculator, and it’ll only allow you to get accurate important metrics.

Summary

Taking everything into assessment, the importance of FD Calculator in this newer generation of online investments is deep rooted. No one wants to be involved in scientific mathematical formulas, or visiting the financial advisors for simplistic kinds of investments; say FD.

It operates conveniently taking just a few required details handy to you; Principal Amount, Rate of Interest, and the tenure period. Thereafter, it automatically calculates to bake you the 100% accurate results.

Except for that, this article isn’t meant to be financial advice, as all your investment decisions would be up to your sole consciousness. Fixed Deposits are just the risk averse or non-risk kind of investments, but finding a well trusted institution is a must towards profitable reserves.

Frequently Asked Questions (FAQs)

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