Interest is compounded quarterly on fixed deposits in Indian banks, whether they are public sector banks or private sector banks. It is possible to receive interest from these banks at intervals of one month, three months, one year, or cumulative interest.
In case one opts for payment of interest at monthly intervals, the interest rate applicable would be slightly less than the prevailing rate. In SBI, seniors receive 5.6% interest per annum for deposits of at least two years and longer, and 5.6% interest is paid for quarterly or longer payouts. However, for the same period of deposit, the applicable rate is 5.4% for monthly payouts of interest.
In addition to being a trusted investment option, the fixed deposit offers high returns and is secured by a secure investment scheme. Its returns are not dependent on the market, as an FD is risk-free. Fixed deposits offer the highest FD interest rates and flexible tenures. If you are financially stable, you can opt-out.
The term “fixed deposit” refers to both cumulative and non-cumulative investments. Cumulative FDs are deposits that will earn you the highest FD interest rates at maturity, as well as the money you invested. Unlike a cumulative FD, a non-cumulative FD pays interest periodically according to your financial situation. Instead of receiving the amount you have, you will get the amount you have at the end of the tenure.
In India, fixed deposits are becoming increasingly popular. The returns offered by fixed deposits and their flexibility make them an attractive investment option. With this tool, account holders are able to estimate the amount that will be due on the maturity date of their FD in advance. In order to plan for the future, it is beneficial to calculate returns. Calculating fixed deposit returns online is easier with an online FD interest rates calculator.
A formula for calculating the return on FDs
It is possible to calculate the return on FDs both manually and with the help of an online FD calculator. With the formula provided below, you can manually calculate the returns on fixed deposits.
return=principal investment + (principal investment and interest rate x investment tenure/100)
It is valid to calculate returns manually. A high chance of errors, however, makes it a time-consuming process.
What are the benefits of using an FD calculator?
Online FD calculators offer the following benefits.
- Online calculators for fixed deposits make it easier to estimate returns when there are multiple variables.
- By comparing different FD schemes from different lenders, it is possible to find the best deal.
- The manual calculation is difficult to achieve with FD calculators.
Calculating Fixed Deposits: Steps to follow
Anyone with computer access can use an FD calculator. They can follow the steps by opening any online FD interest rates calculator.
- Make a decision about the amount of fixed deposit investment that you want to make.
- The interest rate applicable to the chosen lender should be entered.
- Choose a tenure for your investment.
When all the necessary inputs have been provided, the maturity amount of a fixed deposit will be calculated and displayed. For the lock-in period of an FD that is renewed, the prevailing interest rate on the date of renewal will apply. A financial institution that reduces the interest rate on its FDs will be disadvantageous if it auto-renews its FDs.