Know these important things before using a FD calculator

A fixed deposit calculator is a free-to-use online calculator that uses a simple formula to give an accurate estimate of your fixed deposit maturity amount. It helps investors make informed decisions before they invest their corpus in an FD.

How does an fd calculator work?

Fixed deposit is one of the most popular investment schemes in India that lets investors invest a set amount for a fixed period or tenure at a prevailing interest rate. This scheme provides guaranteed returns at no risk, and it makes it one of the most preferred investment options for most Indians. The interest rates for fixed deposits vary from bank to bank, and the tenures are flexible, ranging from 7 days to 10 years. 

A fixed deposit calculator helps investors know the cumulative amount they will accrue at maturity. Calculating the fd maturity amount manually can be tedious and prone to errors, and the fd returns calculator simplifies that process. Simply put, the deposit amount, tenure, and the rate of interest to get the maturity amount. 

Benefits of using the FD calculator

  • Accurate results with a minimal score of errors
  • Free to use, and there are no restrictions on the number of times you can use it
  • Easy to compare the returns using various options

Things to note before using an FD calculator

  1. Interest payout: Understand that investors can choose from the interest payout – monthly, quarterly, half-yearly, annually, or cumulative. Therefore, the interest is also calculated in two ways – simple interest and compound interest. In the simple interest method, the interest is calculated on the principal amount invested, and in the cumulative method, the interest is calculated on the principal amount as well as on the interest amount.
  2. Compare the FDs: You can use the FD calculator to compare different fixed deposit schemes offered by multiple banks. You can optimise your investment by comparing the maturity amount at different interest rates offered by the banks by using the fd calculator.
  3. Flexible duration: A fixed deposit comes with flexible tenures ranging from 7 days to 10 years with banks like IndusInd Bank. You can easily modify the tenure in the FD calculator to get the desired maturity amount and make an informed decision before you invest.

Fixed deposits help develop a habit of saving and open the doors for diversified investment. As there is no risk of investment loss, the investor can rest assured that the returns are guaranteed and their savings are safe. This ensures the investors that they have the necessary financial backup in case of an emergency. 

Fixed deposits are not just an investment tool; they also help reduce tax liability for the investor. Many banks offer tax saver FD options to investors they can use to get tax deductions. If you are looking for a safe avenue to park your funds to get assured returns, then fixed deposits are your best bet.