A fixed deposit (FD), also called a term deposit, is a safe investment route using which you can strike the correct balance in investment in your financial portfolio. With the online FD calculator, you can get the correct values about how much you must invest in a fixed deposit instrument and for how long you must remain invested to meet a specific financial goal.
Read on to know in detail about the benefits and features of using an FD calculator.
What’s an online FD calculator?
An online FD calculator is an instrument designed to provide you with an estimate regarding the maturity value that you must expect towards the end of the selected investment tenure on a particular deposit amount at applicable bank FD interest rates.
In simpler words, an online FD calculator is an instrument, which assists you in computing how much interest constituent you may earn on the fixed deposit. The instrument requires 3 crucial details to compute the interest amount. The details include deposit amount,FD tenure and interest rate. On adding these 3 details, the maturity amount gets displayed instantly. The maturity amount is what you will get once the FD tenure ends. Note that the maturity amount consists of 2 components – principal i.e., the deposit amount and interest i.e., the amount earned on the deposit value.
How can you use the online FD calculator?
To use the online FD calculator, you must follow the below-listed steps –
· Input the deposit value in the space where you are asked to enter the fixed deposit amount
· Input the expected FD interest rate in the space where you are required to enter the interest rate
· Input the investment duration i.e., the period for which you want to stay invested in the FD
Once you have added these details, you must hit on the calculate option. Upon hitting the calculate button, the computed figure will be instantly displayed. This figure is the maturity amount that you may expect by the end of the investment duration. The division of maturity amount also is shown, which allows you to know the interest amount that you may earn on the capital or principal invested.
Why is it recommended to use the online FD calculator?
A fixed deposit is linked with minimising your risks and getting satisfactory but assured returns. As an FD is a fixed-income instrument with guaranteed returns, this investment may assist you to absorb losses that you may face in a market-linked investment. However, to balance out your market investments, you must know how much you must invest in your FD account and the returns you may get on the investment. Here’s where an online FD calculator may help you.
With an online FD calculator, you may not just calculate the interest earned on capital instantly but also can compare amongst the different kinds of fixed deposit schemes offered by financial institutions. Using the calculator, you can easily comprehend the best scheme as per your preference and financial goal or investment motive.
Ending note
Using an online FD calculator is recommended because of the benefits that this tool provides. Using this tool eliminates any scope of error, which is possible in the case of manual calculation. Also, with this tool, you can save plenty of effort and time, as the tool computes the results instantly making it easy for you to compare different schemes. Lastly, this is a free-to-use tool available on almost all financial institutions’ websites.