Creating monthly budgets, sticking to them, and saving money are healthy financial habits that every individual must adopt. However, if you are adopting this habit to generate a sizeable corpus, this might not be the right approach. First of all, it’s not sustainable, and it only reserves what you earn, it doesn’t multiply your wealth.
Savings schemes, on the other hand, not only multiply your wealth but help you build sustainable savings habits that benefit you financially in the end. One such savings scheme is the fixed deposit scheme.
Fixed deposit is not a new name for investors. So, if you have heard of it before, and are planning to invest in it, ensure that you are using this highly recommended tool, called the FD calculator.
We will be telling you about a fixed deposit calculator in this guide. But before that, let us take a moment to understand what a fixed deposit is.
What is a Fixed Deposit?
A fixed deposit is a savings scheme that demands an investor to make a lump-sum deposit. This lump-sum deposit earns a fixed interest rate every year. Owing to the power of compounding, the interest amount + the principal amount of investment earns interest, ultimately multiplying wealth.
A fixed deposit scheme is offered by the post office and leading banks in India. They usually have a tenure ranging from 7 days to 10 years, depending on the investor’s preference and the bank. The FD interest rate too varies from bank to bank.
What is an FD Calculator and What Does it Do?
An FD calculator is an online tool that estimates the maturity amount accumulated in your fixed deposit account. The tool factors in the interest rate, investment duration, and the lump-sum deposit to provide an estimate of the maturity amount.
The maturity amount can also be calculated manually, using a compound interest formula. However, calculating the maturity amount manually can be complex, and time-consuming.
Advantages of Using an FD Calculator
An FD calculator can be highly beneficial for you if you are planning to invest in a fixed deposit. Here are all the advantages of using an FD calculator:
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It is Easy to Use:
If you are someone who is not equipped with technology and are afraid you will not be able to use an FD calculator, don’t fret. An FD calculator comes with an extremely convenient interface that can be used by anybody to calculate the maturity amount and do their financial planning.
All you are required to do is enter the investment amount, rate of interest, and investment tenure. The FD calculator will calculate the maturity amount for you in a jiffy. Some FD calculators also require you to provide your details such as name, contact number, and email id. You might need to provide the same before entering investment-related details that calculate the maturity amount for you.
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Gives you Error-free Results:
If you opt to manually calculate the maturity amount, it might be subject to inconsistencies and errors. But you can avoid all that by using an FD calculator. An FD calculator gives you error-free results in a matter of time.
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Saves your Time:
We are already on our feet, running against the clock doing our usual chores. In such hectic schedules, doing complex calculations and wasting time can be avoided with an FD calculator. An FD calculator can provide you with accurate results in a matter of minutes. So, while an FD calculator calculates the maturity amount for you, you can go on doing essential tasks that demand your attention and time.
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Supports your Financial Planning:
A sustainable financial future cannot be possible without financial planning. For smooth financial planning, a reliable savings fund and an impressive investment portfolio are essential. A fixed deposit serves both purposes – it is a savings fund as well as an investment tool. As you can use an FD calculator to estimate the maturity value, it can help you take significant financial decisions. You can ascertain the amount you further require to meet your savings goal and the investment option you can choose to earn optimum returns (if you are looking for high returns, a Systematic Investment Plan is the ideal choice. You can use a SIP calculator online to decide how much should you invest to reach your ideal maturity amount).
Final Thoughts:
An FD calculator offers you numerous advantages. So, if you are planning to invest in a fixed deposit scheme, ensure that you are using an FD calculator. It will provide you with the maturity amount easily and quickly.
Make your financial planning easy with an FD calculator!
