FD Calculator: 4 Benefits That Make It Crucial For Investment Planning

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FD Calculator: 4 Benefits That Make It Crucial For Investment Planning

An FD calculator estimates your returns based on the investment terms, including the amount you intend to invest.

The fixed deposit is a low-risk avenue that many rely on for financial growth. However, planning is essential in ensuring that your investments will give the desired results. When you plan, you can understand and adjust your investment as per your goals and preferences.

In terms of an FD, one of the best ways to map your investment is to use an FD calculator. This online tool gives you an estimate of your FD earnings, allowing you to make informed investment decisions.

Today, a majority of fixed deposit issuers and aggregators offer this tool on their websites, enabling you to use it as and when needed. In addition to this, there are many reasons why you should use the calculator before investing.

Read on to learn why using an FD calculator is crucial for well-planned investments.

4 Benefits of an FD Calculator for Investment Planning

Listed below are some of the top benefits that you can enjoy and invest in as per your finances and goals.

Assess Desired Investment

An FD calculator estimates your returns based on the investment terms, including the amount you intend to invest. As such, if you see that the estimated returns are less than what you want, you can adjust the terms to find the ideal amount.

Knowing this in advance helps ensure that you are not blindsided by low returns. Not having the desired returns upon maturity can strain your finances then as you would have to look for other sources to fill the gap, something you can avoid with this tool.

Enables Easy Comparison

The main intent of any investment, including your fixed deposit, is to grow your finances, which depends on the returns you get. Given that there are numerous issuers offering competitive interest rates, a comparison is a crucial step to maximise your returns.

An FD calculator helps you do that, as it comes with unrestricted access at no cost. This allows you to compare different options freely. By understanding the different terms that offer the desired returns, you can choose the most feasible and comfortable option.

Gives Accurate Estimates

When planning an investment, accuracy about all the factors is crucial. If you invest in a fixed deposit based on inaccurate estimates, you may end up investing inadequately. Investing less results in lower returns, while investing more may result in missing an opportunity to leverage other investment options.

An FD calculator saves you from all of this as it is a formula-based automatic tool. This eliminates the risk of getting inaccurate estimates through manual calculations that may jeopardise your investment.

Saves Time

While you can manually calculate the returns on your FD, the process can take a lot of time and is also prone to errors. Given this, you may be unable to invest appropriately, resulting in subpar returns.

Both of these can hamper your plans, but it is something you can avoid with an FD calculator. The online tool is easy and quick, requiring only minimal information and clicks from you. By using the calculator, you can get an estimate in minutes, which facilitates quick investment decisions.

Now that you know the benefits of using an FD calculator for well-planned investments, here is information on how it works and how you can use it.

How Does an FD Calculator Work?

An FD calculator is a digital tool that estimates your returns based on your investment terms. The formula may be different (simple or compounding), and therefore the returns may vary.

However, the estimates are still something you can rely on as the rate is fixed from day one, as are your returns. To use the tool, all you need is the amount, interest rate, tenor, and type of fixed deposit.

With this information at hand, you can visit any issuer or aggregator website and use the calculator. Outlined below are the general steps to use the calculator:

  • Visit the preferred issuer/aggregator website
  • Navigate to the FD calculator page
  • Enter the investment details
  • Choose the fixed deposit type (cumulative or non-cumulative)
  • Click on submit

Now that you know how an FD calculator helps you make better investment decisions, be sure to use it and optimise your fixed deposit accordingly. With this tool, you can maximise your returns and ensure optimal financial growth.

In addition to the returns, consider other factors that affect your investment. This includes choosing an issuer with a good reputation and rating to ensure your corpus stays safe and secure.

You also need to consider add-on features such as loans against FD, premature withdrawal, and more. This will allow you to choose a fixed deposit issuer that offers the best features, enabling you to get the most out of your hard-earned money.

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Writer : Devanshee Singh
Editor : Antara Gupta
Creatives : Devanshee Singh