Fixed Deposits are a financial investment instrument that several banks offer. An FD lets you invest a specific sum for a particular period. When you open the deposit, the funds you deposit in your FD earn interest at a fixed pre-determined rate. You get the principal amount you invested and the compound interest at the end of the FD tenure. Customers can also get the interest on an annual, quarterly, monthly, or half-yearly basis.
An FD is a safe and reliable method of growing your funds. However, if you want to determine the potential returns of your deposit, calculating them usually involves complex interest calculation. This is when an online FD calculator helps. This tool assists in multiple ways, including with financial planning. Let us learn more about this calculator, consider its advantages, and check how it helps with financial planning.
Overview of an FD calculator
An FD calculator is a user-friendly tool that computes FD returns by considering the tenure, principal amount, and Fixed Deposit interest rate. It is invaluable and gives an estimate of the maturity amount and interest earned.
Advantages of using an FD calculator
FD calculators offer multiple benefits:
- A precise estimate
When you use an online FD calculator to calculate the maturity and interest amounts, it keeps you from doing complex calculations. It also helps you get an accurate estimate and eliminates the risk of error that may happen due to miscalculations.
- Allows comparisons
This calculator also lets you compare the maturity amounts of various banks. This way, you can select an optimum FD scheme for yourself.
- Easy to use
Using this calculator to determine the interest and the maturity amount is easy. You just need to enter some basic details, such as tenure, principal amount, etc., to get the results.
FD calculators and financial planning
An FD calculator lets you easily determine the maturity amount and interest payout of your FD beforehand. This helps match your FD to your financial goals and cash flow needs. For example, when you use the calculator to determine the maturity amount of your FD, you can evaluate if the sum you receive at the end of the tenure is enough to meet your financial goals.
On the other hand, such a calculator also determines if the interest income you get from choosing a payout option would meet your cash flow needs.
Conclusion
An FD calculator often comes across as an invaluable tool and lets you get an estimate of the maturity amount you will receive when the tenure ends and the interest you earn. It offers multiple benefits and can even assist with financial planning.
