Whether it is ours, or our children’s dreams, we know we cannot depend on our monthly paycheques for it. We need sizeable savings funds to let our loved ones and us live our dreams, especially if we are the only breadwinners of the family.
You can accumulate sizeable savings by cutting down expenses, but it can take too long. If you are looking for a speedy way to build your ideal savings fund, savings schemes like fixed deposits are the reliable methods.
So, if you are thinking of investing in a savings scheme, it is recommended that you use an FD calculator. It will get you started on your savings journey.
We will be telling you more about an FD calculator in this guide.
What is an FD Calculator, and Why Should you Use it?
An FD calculator is an online tool designed to help you estimate the maturity amount your fixed deposit account will accumulate at the end of the investment tenure. It is an easy, free-to-use tool that saves you from complex calculations. All you are required to do is enter the following information in the FD calculator:
- Investment tenure
- Investment amount
- FD Interest Rate
If you are unsure about these figures, you can experiment with the number of your choice and, based on the result, decide if the maturity amount would be sufficient to live the life of your dreams.
An FD calculator is a reliable tool to help you formulate your financial plans. The tool can help you take significant purchasing and investment decisions that can help you enhance your financial standing in the future. Based on the result it shows, you can decide how much you have to invest in creating the savings fund you planned on.
How Does an FD Calculator Compute the Maturity Amount?
The maturity amount is calculated through the compound interest formula.
A = P (1+r/n) ^ (nt)**
A = Amount of maturity
P = Deposited amount
r = Rate of interest
n = number of compounding in a year
t = Investment tenure
What to Know About FD Interest Rates?
Post offices and leading banks in India offer a fixed deposit saving scheme. Consequently, the interest rate for fixed deposits differs from bank to bank. If an investor signs up for a fixed deposit, the interest rate will remain the same throughout the investment tenure. If you are looking for the interest rate in the FD calculator, check with the bank about the interest rate they offer.
How to Invest In FD?
Now that you know about an FD calculator, let’s get you started on your savings cum investment journey:
- Numerous NBFCs and leading banks in India offer a fixed deposit. So, the first step to investing in FD is finding the bank of your choice. Before you do, take into consideration the FD interest rate. Different banks offer different FD interest rates. A reputed bank that offers you a high FD interest rate should be your choice.
- Once the selection has been made, contact the bank to set up a fixed deposit account. If you don’t have a bank account with the same bank, you would have to submit certain KYC documents, as instructed by the bank.
- If you already have a savings account, you can create a fixed deposit account. Just visit the bank branch and submit the FD application form after downloading it from the website.
- To do the process online, log in to the net banking portal and click “Set up an FD account”.
- Fill in the required information, such as your investment tenure, nominee, branch, and investment amount. You can use an FD calculator to ease your decision-making.
Make the deposit, and you will be done. Your fixed deposit amount would earn interest throughout the investment tenure.
An FD calculator can come as a knight in shining armour when you are just beginning your fixed deposit journey. As the maturity amount would depend on the lump-sum deposit and the investment tenure, you can use an FD calculator to decide these elements.
So, go ahead and try out an FD calculator. You can use it for free! Make your financial planning easier than ever with this tool.