All you need to know about FD interest rates and using an FD calculator

Most investors conduct research and invest in several avenues to grow their wealth. However, with fluctuating stock indices and market turbulence, there may be greater investment uncertainties. A good way to balance out your returns, amid these volatilities, is to diversify your investment portfolio, and allocate a significant portion towards fixed income investment instruments.

Fixed income instruments may offer marginally lower returns, but you can gain from the security of consistent, assured returns. A fixed deposit is one of the most preferred investment avenues, because of the stability and flexibility it offers.

By allocating funds towards this instrument you can thoroughly plan your finances in line with your goals. As the returns from a fixed deposit do not depend on the performance of the market, you need not worry about the amount you will receive upon maturity. Calculating your returns beforehand can help you plan your investment and build your wealth smartly.

Take a look at all you need to know about fixed deposit interest rates and how using an FD calculator can help you make a smart choice.

How to calculate interest for fixed deposits?

The manual formula to calculate the returns from your fixed deposit is as follows:

A = P (1 + r/4/100) ^ (4*n)
Here ‘A’ represents the maturity amount, while ‘P’ represents the principal and ‘N’ represents the compounded interest frequency.

Calculating your maturity amount is quite helpful as it gives you a clear picture of what you stand to gain. However, manual calculation can be erroneous and time-consuming too. Hence, top financial institutions provide you with the opportunity to calculate your returns with the help of an online FD calculator. This way you can compare how interest rates offered by different issuers affects your investment and also settle on the best tenor and deposit amount to maximise returns.

You will get the results in seconds and be able to see the principal amount, maturity amount, and the total interest earned at a glance.

Which factors impact your fixed deposit interest rate?

The RBI’s policies and economic climate affect the rate that the financial institution is able to pass on to you. That said, different financial institutions offer different Fixed deposit interest rates.

Here’s a look at some of the other factors that impact your FD interest rate:

- The amount you choose to invest can determine the interest rates. Several institutions have different rates for different amounts.
- The tenor you select for your fixed deposit can also affect your interest rate. Many institutions offer interest rates based on tenors as well as the amount.
- The type of fixed deposit, whether cumulative or non-cumulative, can determine your interest rate too.
- The relationship you have with the issuer is important as existing customers may be able to negotiate a higher interest rate with top institutions.
- The age of the person under whose name the fixed deposit is created can affect interest rates. This is because senior citizens are offered a higher interest rate.

So, use an FD calculator to forecast your returns beforehand and make the right choice whether it is with regards to the issuer or the investment amount. For excellent results choose Bajaj Finance. You can earn up to 8.75% interest on a cumulative Fixed Deposit of 36 months or 9.10% as a senior citizen. What’s more, enjoy online account management, and special tenor FDs that offer 0.25% higher interest. With a minimal amount of Rs.25,000 you can apply online comfortably and benefit from assured returns.