Fixed Deposit Investment Tips and Benefits of Online FD Calculator

By aman

The monetary market fluctuates quite often and any new investor as well as seasoned investor would advise you to opt for the less risky option of all the financial investments – the fixed deposit. It is easy, comfortable and you can even learn how to invest in fixed deposit online without getting out of your chair.

What’s not to like?

Well, various factors influence Fixed Deposit rate, not just the time period and amount. In fact, you would be surprised to note the amount of information circulating in the market that may be incorrect and misguided. Read on to know some of the most common myths associated with fixed deposit tips that you may find and how to steer clear to make the best use of your funds:

However, since fixed deposit investment tips are quite numerous, there are inevitably common running myths with around this investment scheme. For instance:

1. Only Banks can Offer you Fixed Deposits:

False! If you are part of a corporate entity¸ you can also approach your company’s financial department for initiating a fixed deposit account. You can also choose your business investment as fixed deposit by approaching any financial institution other than a bank, so that you have a secure medium for your funds and get steady returns. In fact, companies generally offer a higher interest rate in comparison to what is offered by the banks.

2. You can Avoid Fixed Deposit Taxation:

There is a widespread belief that any five year fixed deposit can offer you tax exemption as is stipulated under the provisions of the Income Tax Act, 1962. However, the law itself says that only few schemes offer you the benefit of fixed deposit taxation if you have the account for a period of five years. If your interest generated income in a given year exceeds Rs. 10,000/- (Rupees Ten Thousand) for bank deposits and Rs. 5,000/- (Rupees Five Thousand) for corporate deposits, then that income will fall under the category of taxable income.

3. Breaking an FD is the only way to Avoid Cash Crunch:

You must be aware that even though FD can be best investment, there is a belief that breaking an FD would be the only way in case of a financial crisis. Many banks and financial institutions offer partial withdrawal, and therefore, you may not have to pay the penalty  if you decide to withdraw a part of the amount that you have invested in the fixed deposit. You can also disburse your funds in different FDs so that there is no pressure on one investment source.

Fixed deposit can be best investment if you are looking for a scheme that offers you long term returns on your money. Many fixed deposit investment tips include asking you to opt for a scheme that would not only offer you great returns but also provide you with Fixed Deposit taxation benefits. Such information may not be enough to initiate savings in a fixed deposit account, because you would need to be abreast of certain common ideas that revolve the concept.

When you go through the above myths, you would know that various factors influence fixed deposit rate and that there are many ways in which you can extricate benefits from your secured income, without falling prey to the popular opinions.

Benefit of Using an online FD Calculator 

You make investments expecting some returns on it.

Whatever savings or investments you have with financial institutions, they earn an interest on the saved amount. While Savings Accounts earn very little interest, Fixed Deposits and other investments offer higher returns. Use FD Calculators to determine the returns you will get on you FD investments.

Fixed Deposit interest rates are fixed at the time of opening the account. So, it is easy to calculate the interest earned and the amount you will get on maturity.  FD Calculator tools will be available at the website of the bank or other financial company you are opening the account in.

They are also available at third party financial websites.

Using Fixed Deposit Interest Calculator Resources

When comparing different fixed deposit offers, you will mainly want to determine the amount you will get from each on maturity. For this, each bank/NBFC website will offer Fixed Deposit Calculator tool. Feed in the amount you want to invest, the tenure, and the interest rate to find the result.

These tools can be varied. You can use a fixed deposit maturity & interest calculator to find the maturity amount and the total interest earned. There are calculators to find the monthly, quarterly, half-yearly, and annual interest earnings,

There are fixed deposit calculator tools to calculate simple interest earnings, periodic interest accrued, and other such details. If you have chosen a cumulative deposit, you can use a Fixed Deposit Compound Interest calculator to find the total yield on your investment.

Where can you Access These Tools?

Each bank or NBFC will have these tools and a link to access the resource on the Fixed Deposit details page. You can also find these tools on financial portals and marketplace websites. Here, you can compare the features of fixed deposit offers and schemes from various financial institutions, and use the FD Calculators to find the maturity amount for each scheme and other details.

If you are going in for simple interest, the result will be a simple calculation of total interest earned added to the invested principal. If you are going in for compound interest, the interest accrued is reinvested or added to the principal. In the next interest calculation cycle, this new amount is taken for calculation, thus earning you more each time. There are fixed deposit compound interest calculators to find out these details.

Calculate the interest earned for different schemes, for different tenures, and for different interest rates offered by many banks and NBFCs. Usually, NBFCs like Bajaj Finserv offer better returns on FD investments than banks. Calculate the maturity amount. Find interest earnings if you are interested in creating fixed income sources. Most financial institutions in India calculate interest quarterly, so calculate the interest you will earn on the deposit amount every quarter to find your potential regular income from the investment.

If you don't need interest payout, choose cumulative deposit. In this case, the interest is compounded for each quarter and you earn more as the principal increases. This provides a better yield on your deposit than simple interest.

The Fixed Deposit interest calculator tools make it very easy for you to determine the benefits of various schemes and compare them, to choose the best one.

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