FD Calculator

What is Fixed Deposit?

Fixed deposit is a term used to describe a type of investment where the investor deposits a fixed sum of money into an account with the bank or Non-Banking Financial Companies **(NBFCs) for a set period of time, typically 7 days to 10 years. At the end of the agreed-upon period, the depositor can either withdraw the money with interest or renew the deposit for another fixed period.

The interest rate on a fixed deposit is generally higher than what is offered on a regular savings account. Generally, the interest rates ranges from 5% to 7.5%.

Why opt for Fixed Deposit?

Fixed deposit is a perfect investment option for risk-averse investors.

• Fixed deposits offer a higher rate of interest than savings accounts.
• The interest earned is usually compounded quarterly and paid to the depositor at the time of maturity.
• Since the money is locked in for a fixed tenure, it prevents the temptation to spend it impulsively.
• Fixed deposits offer tax benefits under Section 80C of the Income Tax Act, 1961.

These all make fixed deposits a great investment option for those looking for steady income over a period of time.

How to invest in Fixed Deposit?

To invest in a fixed deposit, one needs to approach a bank or a non-banking financial company (NBFC).

• The individual then needs to fill out an account opening form and provide documents such as identity proof, address proof and income proof.
• After the account is opened, the individual can approach the concerned branch and ask for a fixed deposit.
• The individual will be given a Fixed Deposit Receipt (FDR) which will mention the amount, maturity date and other details of the investment.
• The individual can also choose to reinvest the maturity proceeds of the fixed deposit into another fixed deposit.
• There may be a penalty for withdrawing money early, so an individual needs to be sure to check with the bank about this before making any decision.

What are different types of Fixed Deposits?

There are different types of Fixed Deposits available in the market, which offer different benefits to the investor.

Standard Fixed Deposit

The Standard Fixed Deposit is a common type of Fixed Deposit, where the investor commits to depositing a fixed sum of money for a fixed period of time. The interest rate earned on the deposit is also fixed, and typically higher than that offered on a savings account.

Tax Saving Fixed Deposit

A Tax Saving Fixed Deposit is similar to a standard Fixed Deposit but offers additional tax benefits to the investor. The interest earned on the deposit is tax-free, which can be beneficial if the investor falls into a high tax bracket.

Senior Citizen Fixed Deposit

A Senior Citizen Fixed Deposit is designed for investors over the age of 60. The interest rate offered on these deposits is typically higher than that offered on standard or tax-saving deposits, as seniors are seen as a more reliable investment option.

Flexi Fixed Deposit

A Flexi Fixed Deposit allows the investor to withdraw money from the deposit at any time, without penalty. This can be useful if the investor needs access to their money in case of an emergency. However, it should be noted that the interest rate earned on a Flexi deposit is usually lower than that offered on other types of Fixed Deposits.

What things should you consider before investing in Fixed Deposit?

There are several things to consider before opening a fixed deposit account.

• First, make sure you understand the terms and conditions of the account, including the interest rate and how long the funds will be locked in.
• Second, make sure you have enough money to cover the minimum deposit required by the bank.
• Finally, compare different fixed deposit accounts to find the best deal for you.

How is Fixed Deposit calculated & the formula used?

Fixed deposit calculator takes into account the interest rate that is being offered on the fixed deposit account and helps you to calculate how much money you will earn on your deposited amount. In addition, a fixed deposit calculator can also help you to determine how long it will take for you to reach your goal based on the interest rate and the deposited amount.

Formula used to calculate simple interest FD:

Principal Amount + (principal x rate of interest x time period/100)

What are the benefits of using Fixed Deposit calculator?

When it comes to money, precision is key. This is why using a fixed deposit calculator is so important. It helps to determine how much money you will earn on your fixed deposit, as well as how much interest you will be paid on that deposit. This information is important in helping you to make the best financial decision for your needs.

When you are dealing with sums of money that you want to grow over time, you need to be as precise as possible about the interest rates and the amount of time you are committing your money to. With a fixed deposit calculator, you can ensure that your money would work as hard as possible.