The Top Features to Look for in an FD Calculator for Accurate Investment Planning
When it comes to investment, fixed deposits are considered quite a safe and low-risk investment. This is because it offers fixed returns, and the principal amount invested is usually insured by the regulatory authorities.
Moreover, if you are planning to invest at an early age, this investment scheme is the best as you already know how much you’ll be reaping out of your investment. Nowadays, many potential investors calculate fd interest beforehand to get a fair idea of their investment.
What is a fixed deposit?
It is a type of financial investment instrument where a potential investor deposits a certain amount of money with a financial institution/bank for a fixed period of time, usually ranging from a few months to several years.
The rate of interest offered here is generally higher than what is offered by a savings account, and it is fixed for the entire deposit tenure. Moreover, the amount invested cannot be withdrawn before the tenure ends. If the investor needs to withdraw the amount due to an emergency, they may incur penalties.
What is a fd interest calculator?
As the term suggests, it is an online tool that is basically used to calculate the interest earned and the maturity value of a fixed deposit investment. This allows the potential investor to determine the interest amount they can earn on their investment before they actually invest their hard-earned money.
This calculator tool uses a simple formula to compute the interest earned based on the principal amount invested, the interest rate offered, and the tenure of the deposit. The formula takes into consideration the compounding frequency of the interest payments (monthly, quarterly, half-yearly, or annually).
What are the top features to look for in an FD Calculator for accurate investment planning?
Such a tool should always have a user-friendly interface so that the potential users face no difficulty using it. In addition, it should generate a clear and detailed report showing the interest earned and maturity value of the investment.
A good calculator should be flexible and allow the potential investor to change the inputs. This will enable them to compare the earnings under different scenarios and make a well-informed decision.
It is the number of times the interest is calculated and added to the initial principal amount. The higher it is, the higher the returns. Therefore, choosing a tool that allows you to select the compounding frequency used by your financial institution is very important.
This tool should offer a wide range of tenure options, allowing one to choose the investment duration. This enables the investor to accurately calculate the returns based on the investment duration.
Rate of interest
It’s essential to have an FD calculator that allows one to input the rate of interest offered by the bank/financial institution accurately. This is essential because even a small variation in the rate of interest can significantly affect returns or even change plans.
Tax deduction on the interest earned on fixed deposits is an essential factor to consider while calculating the returns on the investment. A great calculator should include this feature and help one to determine the actual earnings after tax deductions.